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Look at the following chart.
A chart shows 2 options for producer A. Bullet 1 shows they can produce 200 apples and 100 oranges in 1 day. Bullet 2 shows they can produce 400 apples and 0 oranges in 1 day.
Producer A’s opportunity cost would be
analyzing the climate to see which fruit would grow better.
studying the profitability of growing apples versus oranges.
researching what competitors are doing.
choosing to grow both fruit varieties or only apples.
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Correct answer: "choosing to grow both fruit varieties or only apples."
Explanation: Opportunity cost is the next-best alternative you give up. Moving from (200 apples, 100 oranges) to (400 apples, 0 oranges) means A gives up 100 oranges to get 200 more apples — so the opportunity cost of those extra apples is the 100 oranges (or 0.5 orange per extra apple).
Explanation: Opportunity cost is the next-best alternative you give up. Moving from (200 apples, 100 oranges) to (400 apples, 0 oranges) means A gives up 100 oranges to get 200 more apples — so the opportunity cost of those extra apples is the 100 oranges (or 0.5 orange per extra apple).
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