Homework Answers
If Ned uses all his resources in the production of potato chips then it can produce a maximum of 50 potato chips.
On the other hand, if Ned uses all his resources in the production of computer chips then it can produce a maximum of 25 computer chips.
Potato chips are taken on the Y-axis. So, Y-intercept would be 50.
Computer chips are taken on the X-axis. So, X-intercept would be 25.
Following is the required figure -
Calculate the opportunity cost of computer chip production in terms of potato chips/computer chips -
Opportunity cost = Maximum quantity of potato chips that can be produced/Maximum quantity of computer chips that can be produced
Opportunity cost = 50/25 = 2
Thus,
The opportunity cost of computer chip production in terms of potato chips/computer chip is 2.
Hence, the correct answer is the option (b) [2].
Ans.
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