A farmer can produce either apples or oranges. The following table shows different combinations of apples and oranges that the farmer can produce in a season:[table]
Apples (in thousands) | Oranges (in thousands) 0 | 100 20 | 80 40 | 50 60 | 15 80 | 0
[/table]If the farmer decides to produce 60,000 apples instead of 20,000 apples, what is the opportunity cost in terms of oranges?

Question

BlackTom AI · Accepted Answer

To evaluate the opportunity cost, we compare the two production points given for apples and oranges.
First, note the table entries: at 20 thousand apples, the farmer can produce 80 thousand oranges; at 60 thousand apples, the farmer can produce 15 thousand oranges.
Now examine each answer choice:
- Option a: 65,000 oranges. This would be the difference between 80,000 oranges (at 20,000 apples) and 15,000 oranges (at 60,000 apples), which is 65,000. This matches the observed trade‑off when increasing apples from 20k to 60k and giving up oranges.
- Option b: 30,000 oranges. This would imply a smaller drop in oranges than actually occurs when apples rise from 20k to 60k; the table shows a much larger reduction, so this is incorrect.
- Option c: 15,000 oranges. This corresponds to the oranges remaining at 60k apples, not the cost of moving from 20k to 60k; it understates the forgone oranges and is therefore wrong.
- Option d: 50,000 oranges. This does not align with the actual orange production difference between the two production points (80k minus 15k equals 65k, not 50k); thus it is incorrect.
In summary, the correct opportunity cost is the orange quantity forgone when increasing apples from 20k to 60k, which is 65,000 oranges, while the other options misstate or miscalculate that trade‑off.

251_ECO201 multiple choice practice

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