Answer to Question #163637 in Microeconomics for Ebenezer

Question

1. A farmer can feed any combination of animals within the following range:

Pigs Cows

84 12

75 15

Given the option available to him, what is the opportunity cost to the farmer of rearing one cow?

Answer 1

The opportunity cost is the next best alternative.So, the opportunity cost to the farmer of rearing one cow is rearing three pigs.

Because, when farmer increase cow rearing by 3 (15-12=3) then farmer decrease rearing of pigs by 9 (84-75=9).

for calculating 1 cow, we divide both the side by 3 (i.e 3 cows/3 = 1 cow) and get the opportunity cost of pigs is 3 (i.e 9 pigs / 3 =3 pigs).