Question

Last year Martha could grow 20 bushels of basil or 25 bushels of cilantro on each acre of land that she farmed. This spring, she discovered a free organic fertilizer that allows her to double the amount of cilantro that she can grow on each acre, ceteris paribus. How has Martha's opportunity cost changed with this discovery______________________

Answer 1

Martha's opportunity cost of growing cilantro over basil has decreased by 50%

Step-by-step explanation:

Last year Martha's opportunity cost of growing cilantro over basil was 20/25 = 0.8 bushels of basil per bushel of cilantro. Since her productions possibilities frontier of cilantro has doubled this year, her opportunity cost of growing cilantro over basil is 20/50 = 0.4 bushels of basil per bushel of cilantro.