Asked by Mariia Dublevska on May 06, 2024
Verified
The opportunity cost of producing one keg of beer in Italy is
A) 3/2 pizzas.
B) 12 pizzas.
C) 4 pizzas.
D) 1/12 pizzas.
E) 2/3 pizzas.
Opportunity Cost
The cost of forgone alternatives; the value of the next best choice that one gives up when making a decision.
Keg
A keg is a small barrel traditionally used for transporting and storing large quantities of liquid, especially beer.
Pizzas
A popular dish made from flattened dough topped with tomato sauce, cheese, and various other ingredients, baked at a high temperature.
- Describe the idea of opportunity cost in the context of manufacturing and trading commodities.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
A
Explanation :
The opportunity cost of producing one keg of beer in Italy is the amount of pizzas that could have been produced instead. Given that one Italian worker can produce 8 kegs of beer or 12 pizzas, the opportunity cost of 1 keg of beer is 12 pizzas / 8 kegs = 1.5 or 3/2 pizzas.
Learning Objectives
- Describe the idea of opportunity cost in the context of manufacturing and trading commodities.