Question

It takes Betty 2 h to bake a cake and 7 h to knit a sweater....

It takes Betty 2 h to bake a cake and 7 h to knit a sweater. What is her opportunity cost of 1 cake in terms of knitted sweaters? (Enter the number only and express it in decimal form by rounding to the second decimal place.)

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Answer #1

As per the question Betty takes 2hours to bake 1 cake

Then, he should be taking 1hours to bake 1/2 cake

Betty takes 7hours to knit 1 sweater

he should be taking 1hours to knit 1/7 sweater

Though both the products are made by Betty

So at 1 hours he can produce either 1/2 cake or 1/7 sweater

Thus 1/2 cake = 1/7 sweater

1cake = (1/7)x 2 sweater

1cake = 2/7 sweater

1cake = 0.2857 sweater (by rounding to two decimal places)

1cake = 0.29 sweater

The opportunity cost of producing 1cake = 0.29 sweater

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