Question

v> Combination

Tablet (units) Coffee (units)

A 0 10,000

B 100 9,000

C 200 7,500

D 300 5,500

E 400 0

Find the opportunity cost incurred by the economy to change production from

combination B to D.

(2 marks)

Answer 1

We need to find the difference between B and D

$=$ 9000$-$ 5500$=$ 3500

Therefore to increase tablet units by 200 units the Opportunity cost will reduce by 3500