Question

If the company wants to produce 20 more books that leads to - 5 decrease in the newspaper production

What is the opportunity cost of 1 book?
What is the opportunity cost of 1 newspaper?

Answer 1

Answer:

opportunity cost is cost forgone by availing another opportnity

Explanation:

or cost of shifting resources from one use to another

in above question if co produce 20 books instead of 5 newspaper then they have to forgone the opportunity of producing 5 newspaper

so 5 newspaper cost is opportunity cost

prod of 20 books= prod of 5 newspaper

prod of 1 book= prod of 5/20 newspaper

prod of 1 book=1/4 newspaper

so Opportunity cost of 1 book =.25 prod of newspaper

prod of 5 newpaper= prod of 20 books

1 newspaper=20/5 prod of books

so if co produce newspaper the opportunity cost of one newspaper is =4 units of books