Answer to Question #206184 in Microeconomics for qianhe

Question

Production at Point A - 0 Tubas & 25 dishwashers 

Production at Point B - 30 Tubas & 20 dishwashers 

Production at Point C - 50 Tubas & 10 dishwashers 

Production at Point D - 60 Tubas & 0 dishwashers 

Production at Point E - 40 Tubas & 20 dishwashers 

Production at Point F - 30 Tubas & 10 dishwashers 

Using the production possibilities frontier above:

a) Calculate the opportunity cost of point A move to point B.  

b) Calculate the opportunity cost of point C move to point D.                        

Answer 1

Opportunity Cost: Opportunity cost is the value a person could have received or could have lost when he would have opted for an alternative over another.

 

a) Given,

Production at Point A is 0 Tubas & 25 dishwashers 

Production at Point B - 30 Tubas & 20 dishwashers 

Therefore The opportunity cost of point A move to point B is:

For 30 more Tubas =Give up 5 dishwashers.

(b) Given,

Production at Point C - 50 Tubas & 10 dishwashers 

Production at Point D - 60 Tubas & 0 dishwashers 

Therefore The opportunity cost of point C move to point D is:

For 10 more Tubas = Give up 10 Dishwashers