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In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, John can produce either 8 loaves of bread or 8 pounds of butter. The opportunity cost of producing 1 pound of butter is:_________.
a. 1/3 hour for Andy and 1 hour for John.
b. 1 hour for Andy and 1 hour for John.
c. 3 loaves of bread for Andy and 1 loaf of bread for John.
d. 1/3 loaves of bread for Andy and 1 loaf of bread for John.
e. none of the above

Respuesta :

Answer:

c. 3 loaves of bread for Andy and 1 loaf of bread for John.

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

For Andy, the opportunity cost of producing 1 pound of butter is = 24 / 8 = 3

For John, the opportunity cost of producing one pound of butter is 8/8=1

I hope my answer helps you

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