Question

On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of bananas can be produced. Between these points, what is the opportunity cost of producing a pound of apples? Group of answer choices

Answer 1

The opportunity cost of producing a pound of apples is 0.5 pounds of bananas.

Step-by-step explanation:

At a point, 500 pounds of apples and 1,200 pounds of bananas can be produced.

While at another point on the same frontier, 300 pounds of apples and 1,300 pounds of bananas can be produced.

The opportunity cost of producing a pound of apples is

=
`(what\ is\ sacrificed)/(what\ is\ gained)`

=
`(1,300 - 1,200)/(500 - 300)`

=
`(100)/(200)`

= 0.5 pounds of bananas