Answer to Question #275414 in Microeconomics for Muhammad Muzammil

Question

a) What is the opportunity cost of increasing the production of trucks

from 4,000 to 7,000 (from A to B)? 2,000 boats; 9,000-7,000

Answer 1

The opportunity cost of increasing the production of trucks by 3,000 units is the decrease in production of boats by 2,000 units. So, the opportunity cost of 1 truck is 2,000/3,000 = 2/3 boat.