Question

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta, respectively, are:

A. 0.25 apples; 0.5 apples.
B. 9 apples; 4 apples.
C. 0.5 apples; 0.25 apples.
D. 2 apples; 4 apples

Answer 1

Answer: Option 'B' is correct.

Explanation:

Since we have given that

In case of Alpha:

Number of oranges = 18

Number of apples = 9

In case of Beta :

Number of oranges = 16

Number of apples = 4

We need to find the opportunity cost of producing 1 orange for Alpha and Beta.

Opportunity cost for Alpha is given by

`\frac{\text{number of sacrificing units}}{\text{Number of gaining units}}\\\\=(18)/(9)=2`

Opportunity cost for Beta is given by

`(16)/(4)=4`

Hence, Opportunity cost for producing 1 orange for Alpha and Beta are 9 apples and 4 apples respectively.

Hence, Option 'B' is correct.