Question

Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses

Answer 1

25 silk leaves

Explanation:

The opportunity cost would be what was normally stopped by doing something else, we have two scenarios:

First stage:

A combination of 60 silk roses and 80 silk leaves

Second stage:

A combination of 70 silk roses and 55 silk leaves

Therefore, comparing the two scenarios, by producing more silk roses, the amount of silk leaves is decreased, by the following amount:

80 silk leaves - 55 silk leaves = 25 silk leaves.

Therefore the opportunity cost is 25 silk leaves