a country produces only apples and bananas. moving from point a to point b along its production…

a country produces only apples and bananas. moving from point a to point b along its production possibilities frontier, 5 apples are forgone and 4 bananas are gained. what is the opportunity cost of a banana?\n\no 4 apples\n\no 5/4 of an apple\n\no 1 banana\n\no 4/5 of an apple\n\no none of the above answers is correct.

a country produces only apples and bananas. moving from point a to point b along its production possibilities frontier, 5 apples are forgone and 4 bananas are gained. what is the opportunity cost of a banana?\n\no 4 apples\n\no 5/4 of an apple\n\no 1 banana\n\no 4/5 of an apple\n\no none of the above answers is correct.

Answer

Explanation:

Step1: Recall opportunity - cost formula

Opportunity cost of producing one unit of good X (bananas here) is the amount of good Y (apples here) forgone divided by the amount of good X gained.

Step2: Apply values to formula

The number of apples forgone is 5 and the number of bananas gained is 4. So the opportunity cost of a banana is $\frac{5}{4}$ of an apple.

Answer:

B. 5/4 of an apple