Question

Ann can produce 10 bananas or 40 fish per day. Bob can produce 10 bananas or 10 fish per day. Calculate the opportunity costs of one banana for Ann and Bob.

Answer 1

The opportunity cost of one banana for Ann is 4 fish, while for Bob it is 1 fish.

Step-by-step explanation:

Opportunity cost is the value of the next best alternative that is given up when making a choice. To calculate the opportunity cost of one banana for Ann, we compare it to the number of fish she could produce. Ann can produce 10 bananas or 40 fish per day, so her opportunity cost of one banana is 4 fish (40 fish divided by 10 bananas). On the other hand, Bob can produce 10 bananas or 10 fish per day, so his opportunity cost of one banana is 1 fish (10 fish divided by 10 bananas).