Question

In Situation B, the Opportunity Cost of producing $1,000$ Cellphones is?

Situation	Cellphones(units)	Rice(quintals)
A	$0$	$60,000$
B	$1000$	$55,000$
C	$2000$	$48,000$
D	$3000$	$38,000$
E	$4000$	$23,000$
F	$5000$	$0$

• A. $60,000$ quintals of rice
• B. $55,000$ quintals of rice
• C. $5,000$ quintals of rice
• D. Nil

Answer 1

Answer: (C)

$5,000$ quintals of rice

Opportunity cost of production of a commodity refers to the cost which the producer has to sacrifice in terms of the next best alternative which could be produced out of that cost in order to produce every unit of the given commodity. Therefore to produce 1000 cellphones, 5000 quintals of rice is to be sacrificed that is 60,000 - 55,000