Question

Last year, Farmer Bob’s PPC showed that he could grow 25,000 bushels of carrots or 50,000 bushels of potatoes. That meant his opportunity cost was 2 bushels of potatoes for every 1 bushel of carrots he grew. But this year, he’s using a new fertilizer that allows him to grow 50,000 bushels of carrots and 100,000 bushels of potatoes. Since he can now grow more of both crops, does he still have opportunity cost? Or has the new fertilizer made the opportunity cost disappear?

Answer 1

Yes Farmer Bob still has an opportunity cost

His opportunity cost hasn’t changed it’s still 2 bushels of potatoes for every 1 bushel of carrots he grew.