Question

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input. Compute the opportunity cost of producing one additional unit of food instead of textiles.

Answer 1

Answer: 1.67 yards of textiles

Explanation:

The country can either produce 10 yards of textiles or 6 pounds of food. Opportunity cost of producing one additional unit of food instead of textiles will therefore be;

= 10/6

= 1.67 yards of textiles

This shows that for every pound of food produced, 1.67 yards of textiles are foregone.