If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year. (If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points,• What is Michelle’s opportunity cost of producing potatoes?
What is Michelle’s opportunity cost of producing chickens?
Opportunity cost is represented by what you're losing by choosing one option. For example, by going to the movies your opportunity cost is doing your homework. Therefore, the opportunity cost of producing potatoes is 50 chickens. The opportunity cost of producing chickens is 200 potatoes.
i don't get it
The university has built a new parking garage. There is always an availale parking spot,
but it costs $1 per ay. Before the new garage was built, it usually took 15 minutes of cruisint to
fina a parking space. Compare the opportunity cost of parking in the new garage witht that in the
old parkiing. Which is less costly and by how much?
To find Michelle's opportunity cost of producing potatoes, we need to determine how many chickens she would have to give up in order to produce an additional pound of potatoes.
Since Michelle can produce 200 pounds of potatoes per year, we can consider this as the maximum amount of potatoes she can produce. If she decides to allocate all her resources to potatoes, she would not be able to produce any chickens.
Now, let's calculate the opportunity cost. If Michelle shifts her resources from potatoes to chickens, she would need to determine how many chickens she could produce by giving up one pound of potatoes. Since she can raise 50 chickens per year, we can divide this by 200 (the maximum amount of potatoes she can produce) to find the opportunity cost per pound of potatoes.
Opportunity cost of producing potatoes = 50 chickens / 200 pounds of potatoes = 0.25 chickens per pound of potatoes.
Therefore, Michelle's opportunity cost of producing potatoes is 0.25 chickens per pound of potatoes.
To find Michelle's opportunity cost of producing chickens, we use the same reasoning. If she devotes all her resources to raising chickens, she can produce 50 chickens per year and zero pounds of potatoes.
If Michelle decides to shift her resources from chickens to potatoes, she would need to determine how many pounds of potatoes she could produce by giving up one chicken. Since she can produce 200 pounds of potatoes per year, we can divide this by 50 (the maximum number of chickens she can produce) to find the opportunity cost per chicken.
Opportunity cost of producing chickens = 200 pounds of potatoes / 50 chickens = 4 pounds of potatoes per chicken.
Therefore, Michelle's opportunity cost of producing chickens is 4 pounds of potatoes per chicken.