Question

30. Neneh can produce either apples or oranges on her farm and the explicit cost of production is the same for both. At the moment she’s growing apples. Her accountant tells her that she is making money. Neneh’s friend, who is an economist, also tells her that she is making profits. This must mean that the revenue from growing apples is greater than

31. a. The explicit cost of growing apples.
    b. The revenues from growing oranges.
    c. The opportunity cost of growing apples. d. All of the above.

Answer 1

Neneh's accountant as well as economist friend told her that she is making a profit.

This means that Neneh is making accounting as well as economic profit.

This implies that Neneh is able to earn revenue in excess of its explicit and implicit cost.

The sum of explicit and implicit cost is termed as opportunity cost.

So,

This must mean that the revenue from growing apples is greater than the opportunity cost of growing apples.

Hence, the correct answer is the option (c).