A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 4 bushels ofbeans, then her opportunity cost of 1 bushel of beans is0.25 bushels of corn.16.00 bushels of corn.4 bushels of corn.O 2.99 bushels of corn.

Answered: A farmer produces both beans and corn…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 4 bushels of
beans, then her opportunity cost of 1 bushel of beans is
0.25 bushels of corn.
16.00 bushels of corn.
4 bushels of corn.
O 2.99 bushels of corn.

Expert Solution

Step 1

Answer:

Opportunity cost: opportunity cost refers to the units of a good sacrificed to produce one more unit of another good.

Here, if the gives up 16 bushels of corn to produce 4 bushels of beans then the opportunity cost will be as given below:

$O C_{b e a n s} = \frac{b u s h e l s o f c o r n s a c r i f i c e d}{b u s h e l s o f b e a n s p r o d u c e d} O C_{b e a n s} = \frac{16}{4} O C_{b e a n s} = 4 b u s h l e s o f c o r n$

The opportunity cost of 1 bushel of beans is 4 bushels of corn.

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