An agro-processing enterprise operating at full capacity can produce either 150\text{ bags… — JAMB UTME

An agro-processing enterprise operating at full capacity can produce either $150\text{ bags}$ of cassava flour or $100\text{ bags}$ of garri per day using its fixed processing equipment. Assuming a constant rate of transformation between the two goods, what is the opportunity cost, in bags of cassava flour, of increasing garri production from $40\text{ bags}$ to $70\text{ bags}$ per day?

Cevap: 45 bags

Cevap

The opportunity cost of increasing garri production by 30 bags is 45 bags of cassava flour.

The opportunity cost of producing one additional bag of garri is

150 / 100 = 1.5\text{ bags}

of cassava flour. Increasing garri output from

40

70\text{ bags}

requires producing

30

additional bags. Consequently, the total opportunity cost is

30 \times 1.5 = 45\text{ bags}

of cassava flour foregone.

Adım Adım Çözüm

Calculate the unit opportunity cost of garri

Opportunity cost of 1 bag of garri = 150 / 100 = 1.5 bags of cassava flour

Given full utilization of fixed resources, producing maximum cassava flour (150) versus maximum garri (100) establishes a constant trade-off ratio of 1.5.

Calculate the increase in garri production

70 - 40 = 30 bags of garri

The question specifies an expansion in garri output from 40 bags to 70 bags.

Calculate total foregone cassava flour

30 × 1.5 = 45 bags of cassava flour

Multiplying the extra garri produced by the unit opportunity cost yields the total foregone alternative.

Anahtar Kavram

Opportunity Cost Calculation

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