Question

Production Possibilities (alternative)

	A	B	C	D	E	F
Hot pockets	$15$	$12$	$9$	$6$	$2$	$0$
Eggs	$0$	$6$	$11$	$15$	$18$	$20$

Referring to the table, in moving from point D to point C, the opportunity cost of $1$ more Hot Pocket is:

• A. $4$ eggs
• B. $\frac{1}{6}$ eggs
• C. $1$ egg
• D. $\frac{4}{3}$ eggs

Answer 1

The correct option is D $\frac{4}{3}$ eggs

The opportunity cost of moving point D to point C, i.e, increasing the production of hot pockets by $3$ units ($9-6$), is $4$ eggs ($15-11$). In this case, the opportunity cost of $1$ more hot pocket is $4/3$ eggs, i.e., $(15-11/9-6)$.