Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75.

For this consumer, the opportunity cost of buying one more apple is:

a) 0.5 of a banana.

b) 2 bananas.

c) 0.8 of a banana.

d) 1 banana.

Question

Business

Abby Nguyen

25 March, 15:31

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75.

For this consumer, the opportunity cost of buying one more apple is:

a) 0.5 of a banana.

b) 2 bananas.

c) 0.8 of a banana.

d) 1 banana.

+5

Answers (1)

Know the Answer?

Joel House · Answer 1

b) 2 bananas.

Explanation:

Provided that

Given budget or income = $12

The price of an apple = $1.50

The Price of a banana = $0.75

Since if we equate this banana and apple price, the opportunity cost is

The price of an apple = The Price of a banana

$1.50 = 2 bananas

The price of one banana is $0.75, for two it is $1.50 after multiplying the price of one banana with two bananas