Economic Awareness - Sectors of Indian Economy
If a country can produce either 200 units of cloth or 400 units of food with the same resources, what is the opportunity cost of producing 1 unit of cloth?
If a country can produce either 200 units of cloth or 400 units of food with the same resources, what is the opportunity cost of producing 1 unit of cloth?
easy Q1 of 15
Step-by-Step Solution
Step 1: Understand opportunity cost concept
Opportunity cost is the amount of the next best alternative forgone per unit of chosen good.Step 2: Calculate opportunity cost per unit
Opportunity cost of 1 unit of cloth = total food forgone / total cloth produced = 400 / 200 = 2 units of food.Final Answer:
2 units of food → Option CQuick Check:
Opportunity cost = next best alternative foregone ✅
Quick Trick: Divide forgone output by chosen output to find opportunity cost.
Common Mistakes:
MISTAKES- Confusing total production with per unit opportunity cost.
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