Question

A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

a. is equal to 0.
b. is between 0 and 1.
c. is equal to 1.
d. is greater than 1.

Answer 1

Answer:

c. is equal to 1. 

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

Let's assume that the farmer can produce:

1. 10 bushels of corn or 10 bushels of cotton, the opportunity cost of both activities is 1. = 1×1 = 1

2. 10 bushels of corn or 20 bushels of cotton. The opportunity cost of producing one bushel of corn is 2 while the opportunity cost of producing one bushel of cotton is 0.5. 2×0.5 =1

In both examples, the multiplication of both opportunity costs equals one.

I hope my answer helps you