Question

Suppose the United States can produce 500 cars or 500 trucks. England can produce either 500 cars or 250 trucks. The opportunity cost of producing 1 car in England is:
A. 1 truck.
B. 2 trucks.
C. 1/2 of a truck.
D. 1/4 of a truck.

Answer 1

Answer:

C. 1/2 of a truck.

Explanation:

Opportunity cost: The opportunity cost is that cost which gives the benefit from one alternative among the available alternatives

Since in the united states, it produces 500 cars or 500 trucks and in England, it produces either 500 cars or 250 trucks. So, the producing 1 car in England would be  

= 250 trucks ÷ 500 trucks

= 0.5 truck