Question

Mike and Sandy are two woodworkers who both make tables and chairs. In one month, Mike can make 4 tables or 20 chairs, where Sandy can make 6 tables or 18 chairs. Given this, we know that the opportunity cost of 1 chair for ____________.

Answer 1

Answer:

for Mike: 0.2 tables,for Sandy: 1/3 tables

Explanation:

To calculate the opportunity cost, we can simply divide the cost of what is given up by what is gained.

=> The opportunity cost for chair can be calculated by dividing the total numbers of table made in 1 month by the numbers of chairs made in 1 month.

• In 1 month, Mike can make 4 tables or 20 chairs, so that the Opportunity cost of 1 chair is: OC of 1 chair for Mike = 4/20 = 0.2 table

• In 1 month, Sandy can make 6 tables or 18 chairs, so that the Opportunity cost of 1 chair is: OC of 1 chair for Sandy = 6/18 = 1/3 table