Question

Monica discovered that she can bake five pies in three hours without giving up production of any cakes. If she were operating on the production possibilities curve, this would be an example of increasing opportunity cost. decreasing opportunity cost. constant opportunity cost. zero opportunity cost. static opportunity coss.

Answer 1

Zero opportunity cost

Step-by-step explanation:

Opportunity cost in business is defined as the value of an alternative forgone to arrive at a more favorably valued option in the course of making a decision. Opportunity cost is necessary as every alternative is considered to have alternative usages.

However , in a situation where no alternative option is given up in arriving at a particular decision , or the given up alternatives have no value to you, it is said that the selected decision comes with no opportunity cost , that is it has a zero opportunity cost.

As Monica could still afford to bake five pies in three hours without giving up the production of any cakes , the production of pies had zero opportunity cost.