Question

3. You have a free evening, and your friends give you a choice between 3 options: 1) Going to Isaac's Bar and Grill 2) Watching The Rocky Horror Picture Show on DVD 3) Kite surfing You absolutely hate Isaac's, but enjoy the other two activities. What is your opportunity cost of kite surfing? (A) Your pleasure from watching Rocky Horro (B) Your pleasure from going to Isaac's (C) Your combined pleasured from the pub and watching Rocky Horror (D) None of the above

Answer 1

3) as the person in question hates to go to the issacs the opportunity cost of kite surffing would be the pleasure from watching rocky horror. here the opportunity cost is the next best alternative a person has which he has to forgone.

4) if the economy produces two goods cocaine nd sports car then using the same resources to produce more cars and less cocaine will not cause this economies ppf to shift because production increase of one good will cause the sacrifice of other and the person will move along the ppf but it will not shift.