Question

The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a dozen eggs?

Answer 1

Answer:

0.6 gallon of milk

Explanation:

Given that,

Price of selling fresh eggs = $1.50 per dozen

Price of selling fresh milk = $2.50 per gallon

Opportunity cost refers to the benefit that is forgone by choosing some other alternative.

Here, the opportunity cost of buying a dozen of eggs is calculated as follows:

= Price of selling fresh eggs ÷ Price of selling fresh milk

= $1.50 per dozen ÷ $2.50 per gallon

= 0.6 gallon of milk