Asked by Maria Amavizca on Jul 06, 2024
Verified
Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.
Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen.
Hot Dog
A cooked sausage, traditionally grilled or steamed, and served in a partially sliced bun as a fast-food.
Hamburger
a popular food item consisting of a cooked patty of ground meat, usually beef, placed inside a sliced bread roll or bun.
- Gain insight into the opportunity cost principle and its utilization in the choices made by consumers.
Verified Answer
AS
Amanpreet SidhuJul 10, 2024
Final Answer :
B
Explanation :
The opportunity cost of one item in terms of another is determined by the slope of the budget constraint. If the slope indicates that for each hot dog you give up, you can get 1/2 of a hamburger, then the opportunity cost of one hot dog is 1/2 of a hamburger. This remains constant along a straight-line budget constraint.
Learning Objectives
- Gain insight into the opportunity cost principle and its utilization in the choices made by consumers.
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