Question

Earth Movers and Shakers operates 3 iron ore mines. This table shows their daily production rates given the number of miners at each mine. All of the miners work for the same wage.

mine-----------tons---- # of miners

mother lode------100-------25
scraping bottom---30-------10
middle drift-------75-------15

The opportunity cost of moving one miner from Mother Lode to Scraping Bottom is?

2 Tons.
3 Tons.
4 Tons.
1 Ton.

Answer 1

The correct answer is: cannot be determined with the information given.

However, if you assume that the marginal output of miner is equal to the average output (a tall assumption in my opinion), then you can answer. The average output per minor at mother lode is 4 tons, the average at scraping bottom is 3. So, moving one miner would mean giving up 4 tons to get 3 tons. Cost = 1 ton.