Question

10. What is the opportunity cost in daffodils to go from 0 tulips to 300 tulips? How does
this opportunity cost compare with the opportunity cost of going from 600 tulips
to 900 tulips?

Answer 1

Answer:

As the decrease in the tulip's quantity in the both cases is the same, hence the opportunity cost will also be the same required that the marginal cost remains constant.

Explanation:

Opportunity cost is the value lost in opting to alternative option. This means that if an ice cream costs me $10 then the opportunity cost of eating an ice cream would be $10 because I haven't enjoyed an alternative of an ice cream which would be worth $10. Likewise, if I am deciding to attend a party but I have previously purchased cinema tickets worth $50 then the opportunity cost of attending the party would be $50 and opportunity cost of watching movie would be the loss of entertainment at the party.

The opportunity cost of producing 0-300 tulips is $5 per tulip then it is more likely that the cost of producing 600-900 tulips will also be $5 per tulip.

Thus the opportunity cost here for each case will be:

Case1 0-300 Tulips: 300 Tulips * $5 per Unit = $1500

Case2 600-900 Tulips: 300 Tulips * $5 per Unit = $1500

But if the cost of producing first 300 units of tulips are different from the third 300 units of tulip then there will be of course a difference in opportunity cost.

Answer 2

• When As the decrease in the tulip's quantity in both cases is the same, hence proof that the opportunity cost will also be the same required that the marginal cost remains constant.

1. After that, the Opportunity cost is the value lost in opting for an alternative option. That means if an ice cream costs me $10 then the opportunity cost of eating ice cream would be $10 just because I haven't enjoyed an alternative of an ice cream which would be worth $10.
2. so that if I am deciding to attend a party then but I have previously purchased cinema tickets worth $50 then the opportunity cost of attending the party would be $50 and the opportunity cost of watching a movie would be the loss of entertainment at the party.
3. When The opportunity cost of producing 0-300 tulips is $5 per tulip then it is more likely that the cost of producing 600-900 tulips will also be $5 per tulip.

Thus that the opportunity cost here for each case will be:

• Then the Case1 0-300 Tulips: 300 Tulips * $5 per Unit = $1500
• Now the Case2 600-900 Tulips: 300 Tulips * $5 per Unit = $1500
• Then if the cost of producing first when the 300 units of tulips are more different from the third 300 units of tulip then there will be of course a difference in opportunity cost.

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