Question

QUESTION 3 Given the information below for Catherine and Nicholas who spend 12 hours per day producing apples, bananas or both, what is Catherine opportunity cost of producing bananas? Catherine Nicholas Hours Needed to Produce in 1 kg. of Apple Banana 2 3 1 4 1.5 apples b. 0.67 apples 4.0 apples d. 0.25 apples

Answer 1

Opportunity cost of producing bananas

12hr per day × 3kg of banana produced per hour =36kg total production

12hr per day × 2kg of apples produced per hour=24kg total production

Now to find the opportunity cost the formula is

How much we are giving up/how much we are getting

But first we have to find how much quantity is produced in one hr

2hr is used to produce one kg apples means in every hour she produces 0.5kg so in 3hr she can produce 1.5kg of apples

And in 3hr Cathrine produces one kg of bananas

So we are giving up 1.5kg of apples for every 1kg of banana so the answer is

O.c= 1.5/1

=1.5kg of apples

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