Opportunity Cost

Ada has ₦5,000 and must choose between buying a set of past examination questions or a new school bag, both priced at ₦5,000. If she decides to purchase the past examination questions, what is the opportunity cost of her decision?

The table below shows the Production Possibility Schedule for an agricultural firm in Enugu producing Palm Oil and Rice using a fixed set of resources:

If the firm reallocates its resources to move production from Combination R to Combination S, what is the opportunity cost per additional ton of Palm Oil produced, and what underlying economic process does this movement represent?

A commercial farm in Kaduna operates with fixed total resources of $10$ hectares of arable land and $120$ worker-hours of labor per day. Producing $1$ ton of maize requires $1$ hectare of land and $12$ worker-hours of labor. Producing $1$ ton of yams requires $0.5$ hectares of land and $20$ worker-hours of labor. Initially, the farm devotes all its resources to maximize maize production, harvesting $10$ tons of maize per day. If the farm owner decides to reallocate resources to produce $3$ tons of yams per day, what is the opportunity cost of this decision expressed in tons of maize foregone?

A commercial farming enterprise in Oyo State uses its fixed land and labor resources to produce Cassava and Yam. The table below presents its monthly production possibility schedule:

What is the opportunity cost of increasing Yam production from $45$ bags to $80$ bags, expressed in bags of Cassava foregone?

Kemi, a fashion designer in Ogun State, earns $₦80,000$ monthly from her tailoring shop. She decides to close her shop for one month to attend an advanced design training program. The program tuition is $₦50,000$ and training materials cost $₦20,000$. What is the opportunity cost of Kemi's decision to attend the training program?

The table below presents the monthly Production Possibility Schedule for a manufacturing firm in Aba producing Leather Shoes and Leather Bags using a fixed quantity of labor and raw materials:

If the plant is currently producing at Combination Q ($20$ hundred pairs of shoes and $140$ hundred bags) and reallocates its resources to increase shoe production to Combination T ($80$ hundred pairs of shoes), what is the average opportunity cost of producing ONE additional pair of Leather Shoes over this range? Express your answer in units of Leather Bags foregone.

A software engineer in Lagos currently earns a salary of $₦500,000$ per month. She is considering quitting her job for one year to pursue one of two mutually exclusive opportunities:

- Opportunity X: Establish an independent tech startup requiring an initial capital investment of $₦3,000,000$, which she must withdraw from her fixed deposit account currently yielding $12\%$ per annum interest. The startup is expected to generate $₦15,000,000$ in total revenue over the year, with total operating expenses (office rent, server infrastructure, and wages) amounting to $₦6,500,000$.
- Opportunity Y: Work as an overseas remote contractor earning a net salary of $₦900,000$ per month with zero capital investment required.

Calculate, in Naira ($₦$), the economic opportunity cost of choosing Opportunity X for the year.

Tunde has $₦50,000$ saved and must choose between buying a laptop needed for an online coding course and buying a smartphone for personal entertainment. If Tunde decides to purchase the laptop, what is the opportunity cost of his decision?

An entrepreneur in Port Harcourt has sufficient capital to establish either a palm oil refinery or a commercial fish farm. If he chooses to invest in the palm oil refinery, what is the opportunity cost of his decision?

A manufacturing firm in Ibadan operates along its Production Possibility Curve (PPC) producing two goods: garments and shoes. Currently, when producing $150$ pairs of shoes, the firm can produce $400$ units of garments. To meet increased market demand for footwear, the firm reallocates its resources to produce $250$ pairs of shoes, causing garment output to fall to $150$ units.

Calculate the opportunity cost of producing one additional pair of shoes in terms of garments foregone.

A commercial farmer in Jos allocates all available agricultural resources to cultivate either Irish potatoes or maize. Using all resources for potatoes yields $100\text{ tonnes}$ of potatoes, while using all resources for maize yields $150\text{ tonnes}$ of maize. Assuming a constant rate of substitution along the production boundary, what is the opportunity cost of producing $1\text{ tonne}$ of potatoes in terms of tonnes of maize?

A bakery in Benin City allocates its daily supply of flour to produce either 100 loaves of bread or 50 meat pies. Currently, the bakery produces 20 meat pies. If the baker decides to increase meat pie production to 35 meat pies, what is the opportunity cost of this decision in terms of loaves of bread foregone?