Question

2 A farmer reduces the land used to grow wheat from 80 hectares to 60 hectares and increases the

use of the land for growing potatoes from 80 to 100 hectares.
What is the opportunity cost of this change?
A The output from 20 hectares used for growing potatoes.
B The output from 20 hectares used for growing wheat.
C The output from 60 hectares used for growing wheat.
D The output from 80 hectares used for growing potatoes.

Answer 1

The correct answer is B. The output from 20 hectares used for growing wheat.

Step-by-step explanation:

Given that a farmer reduces the land used to grow wheat from 80 hectares to 60 hectares and increases the use of the land for growing potatoes from 80 to 100 hectares, to determine what is the opportunity cost of this change, the following calculation must be performed:

80 - 60 = 20

Thus, given that the opportunity cost is what is given, lost or not gained to obtain a certain benefit, and in the case that benefit is that of obtaining 20 hectares to grow potatoes, the cost of said benefit is the loss of 20 hectares used to grow wheat.