Agnes can produce either 1 unit of X or 1 unit of Y in an hour,...

Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

Given the above fact, the opportunity cost of producing a unit of X is

Solutions

Expert Solution

The opportunity costs can be defined as the lost units of output of other goods for producing an additional unit of output of a good.

Since Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

The opportunity cost of 1 unit of X by Agnes= 1 units of Y.

The opportunity cost of 1 unit of X by Brenda= 4/2 units of Y.

=2 units of Y

Rahul Sunny answered 2 years ago

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