Question

In one day Mahar can build 60 picture frames or 30 toys; Antoine can build 15 picture frames or 5 toys. what is mahar and atoine's opportunity cost?

Answer 1

Opportunity cost is the cost or loss which is suffered by consumer on choosing a better option over other. It is the cost of next best alternative forgone.

In case of Mahar, he will choose production of 60 picture frames over 30 toys as it gives him more units as his final produce. Since, cost of goods is not provided, he will have to decide on the basis of production of units. So, in this case, opportunity cost will be the production of toys, i.e. 30 toys.

Similarly in case of Antoine, picture frames will be preferred over toys as it also provides more production. So, opportunity cost of Antoine will be production of toys, i.e. 5 toys.

Opportunity cost of Mahar	30 toys
Opportunity cost of Antoine	5 toys