Question

If the output Y1 decreases by 500 units and output Y2 increases by 500 units when some resources are shifted from the production of Y1 to the production of Y2, then the marginal opportunity cost is:

• A. 0.75
• B. 0.80
• C. 1.00
• D. 0.20

Hint:

To find Marginal Opportunity Cost quickly, remember:
\[ \text{MOC} = \frac{\text{Loss}}{\text{Gain}} \] If the loss and the gain are equal, the opportunity cost is always exactly 1.

Answer 1

The Correct Option is C