Question

A. Jose's opportunity cost of producing and consuming one more orange is 2 melons. b. Alex's opportunity cost of producing and consuming one more orange is 2/3 melon. c. Alex's opportunity cost of producing and consuming one more orange is 4,000 melons.

d. Jose's opportunity cost of producing and consuming one more orange is 1/2 melon.

Answer 1

Since the question is incomplete, we could infer that you like to know how to calculate opportunity cost.

Step-by-step explanation:

Opportunity cost is the value of the next best alternative or option.

Opportunity Cost= FO−CO

where:

FO=Return on best foregone option

CO=Return on chosen option

Let's take for example, Jose expected return on investment in producing one orange is 20 percent over the next year, and also expects the return of investment for melon to be 18 percent over the same period.

His opportunity cost of choosing the melon over the orange using the formula FO−CO = (20% - 18%), which equals two percentage points.