Question

A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is ______________a) 0.38 bushels of cornb) 16.00 bushels of cornc) 2.67 bushels of cornd) 2.99 bushels of corn

Answer 1

Answer:

c) 2.67 bushels of corn

Explanation:

We know,

Opportunity cost of 1st product = $\frac{Total production of 2nd product}{total production of 1st product}$

Given,

She has to give up = 16 bushels of corn.

She can produce if gives up corn = 6 bushels of beans

Therefore,

Opportunity cost of 1 bushels of beans = (16 bushels of corn ÷ 6 bushels of beans)

Opportunity cost of 1 bushels of beans = 2.67 bushels of corn.

So, she has to give up 2.67 bushels of corn to produce 1 bushels of beans.