Final answer:
The opportunity cost for Caleb to produce an additional bushel of apples is two bushels of pears, based on the maximum production possibilities and the slope of the production possibility frontier.
Step-by-step explanation:
The opportunity cost for Caleb to produce one more bushel of apples in terms of pears is two bushels. This is derived from the maximum production possibilities given for both apples and pears. Caleb can produce a maximum of either 50 bushels of pears or 25 bushels of apples. Therefore, for every bushel of apples Caleb decides to produce, he has to give up the production of two bushels of pears. Caleb can produce a maximum of 50 bushels of pears or 25 bushels of apples. So, the opportunity cost of one bushel of apples, in terms of pears, is:
Opportunity Cost = 50 bushels of pears / 25 bushels of apples = 2 bushels of pears
One bushel of apples equals two bushels of pears for Caleb. Using the concept of a production possibility frontier (PPF), which illustrates the trade-offs between the production of two different goods, we calculate the opportunity cost as the slope of the line connecting the two points representing the maximum production capabilities for a single good.