Question

Consider the following information: the marginal products of labor for the US in producing Cars and Wheat are 24 and 18. Given the information above, US's opportunity cost of producing cars is: A. 0.50 wheat B. 1.33 wheat C. 0.75 cars D. 0.75 wheat

Answer 1

Answer:

0.75 wheat

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

the opportunity cost of producing cars, is the quantity of wheat that would have to be forgone to produce one car

18 / 24 = 0.75 wheat