Economic Awareness - Sectors of Indian Economy
If a farmer can produce either 100 kg of wheat or 200 kg of rice using the same resources, what is the opportunity cost of producing 1 kg of wheat?
If a farmer can produce either 100 kg of wheat or 200 kg of rice using the same resources, what is the opportunity cost of producing 1 kg of wheat?
easy Q11 of 15
Step-by-Step Solution
Step 1: Identify the concept
The question tests the calculation of opportunity cost in terms of forgone production.Step 2: Apply the concept
Opportunity cost of 1 kg wheat = amount of rice forgone per kg wheat = 200 kg rice / 100 kg wheat = 2 kg rice.Final Answer:
2 kg of rice → Option AQuick 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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