Question

assume the following is the budget equation for a consumer: 283 Coke and 471 Cheetos = 8921 What is the opportunity cost of one more unit of Cheetos? (Enter this number as positive)

Answer 1

To find the opportunity cost of one more unit of Cheetos, you can calculate how many units of Coke you would have to give up to get one more unit of Cheetos.

The budget equation is:

283 Coke + 471 Cheetos = 8921

To find the opportunity cost, we'll rearrange the equation to solve for Coke:

283 Coke = 8921 - 471 Cheetos

Now, let's calculate how many units of Coke Juan would have to give up to get one more unit of Cheetos. We'll subtract one unit of Cheetos from the right side of the equation:

283 Coke = 8921 - 471 Cheetos - 1 Cheeto

283 Coke = 8920 - 471 Cheetos

Now, we'll divide both sides by 283 to find the number of Cokes given up for one more Cheeto:

Coke given up for one more Cheeto = (8920 - 471 Cheetos) / 283

Now, plug in the value of Cheetos (471) into the equation:

Coke given up for one more Cheeto = (8920 - 471 * 471) / 283

Coke given up for one more Cheeto ≈ 6.53

So, the opportunity cost of one more unit of Cheetos is approximately 6.53 units of Coke.