Dave's opportunity cost of producing 1 pound of corn is ______ pound(s) of green beans. Simon's opportunity cost of producing 1 pound of corn is ______ pound(s) of green beans

Respuesta :

The answer is 2 and 1.

In microeconomic theory, the opportunity cost of a particular activity is the value or benefit provided by engaging in that activity compared to engaging in an alternative activity. More simply, it means that if you choose one activity (for example, investing), you are giving up the opportunity to do a different option. Optimal activity is one that, net of its opportunity costs, provides returns greater than any other activity, net of its opportunity costs.

For example, if you buy a car and use it only to transport yourself, you cannot lease it, whereas if you rent it, you cannot use it to transport yourself. If the cost of transporting yourself without a car is more than what you get for renting a car, the best choice is to use a car yourself. In fundamental equation structure, opportunity cost can be described as: "Opportunity cost = (Earnings from the finest-forgone option) - (Earnings from the preferred option)." The opportunity cost of cutting their own lawn for a doctor or lawyer (who might otherwise earn $100 an hour if they choose to work overtime during that time) would be higher than a minimum wage worker (who might be in the United States earns $7.25 an hour), making the former more likely to hire someone else to mow their lawn.

Learn more about the opportunity cost:

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