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Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases: a. the opportunity cost of buying sweaters decreases. b. the opportunity cost of buying sweaters increases. c. the opportunity cost of buying shirts increases. d. There is no change in the opportunity cost of consuming either good.

Respuesta :

Answer:

a. the opportunity cost of buying sweaters decreases.

c. the opportunity cost of buying shirts increases

Explanation:

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

Let us assume that the price of sweater is $20 and the price of shirt is $10. If the price of sweater increases to $30, the opportunity cost of buying sweater decreases from 10 /20 = 0.5 to 10 / 30 = 0.33.

The opportunity cost of shirt would increase from 20 / 10 = 2 to 30 / 10 = 3.

I hope my answer helps you.

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