Question

Both Denis and Carol produce cupcakes and cookies. If Denis's opportunity cost of 1 cupcake is 3 cookies and Carol's opportunity cost of 1 cupcake is 4 cookies, then what can be concluded?

1) Denis has a lower opportunity cost of producing cupcakes than Carol
2) Denis has a higher opportunity cost of producing cupcakes than Carol
3) Denis and Carol have the same opportunity cost of producing cupcakes
4) Cannot be determined from the given information

Answer 1

Denis has a lower opportunity cost of producing cupcakes than Carol, suggesting he is potentially more efficient in cupcake production.

Step-by-step explanation:

The question asks about opportunity cost in the context of Denis and Carol producing cupcakes and cookies. Opportunity cost is a fundamental economic concept indicating what one must give up to obtain what they desire. In this case, Denis's opportunity cost of producing one cupcake is 3 cookies, whereas Carol's opportunity cost of producing one cupcake is 4 cookies. Therefore, we can conclude that Denis has a lower opportunity cost of producing cupcakes than Carol. This concept implies that Denis sacrifices fewer cookies to make a cupcake, suggesting he is potentially more efficient in cupcake production compared to Carol.