Economic Awareness - Sectors of Indian Economy
A factory can produce either 50 cars or 100 motorcycles in a day. If the factory decides to produce 30 cars, what is the opportunity cost in terms of motorcycles?
A factory can produce either 50 cars or 100 motorcycles in a day. If the factory decides to produce 30 cars, what is the opportunity cost in terms of motorcycles?
medium Q14 of 15
Step-by-Step Solution
Step 1: Understand the production trade-off
The factory sacrifices motorcycle production to produce cars.Step 2: Calculate opportunity cost per car
Opportunity cost per car = 100 motorcycles / 50 cars = 2 motorcycles per car.Step 3: Calculate total opportunity cost
For 30 cars, opportunity cost = 30 × 2 = 60 motorcycles.Final Answer:
60 motorcycles → Option CQuick Check:
Opportunity cost = next best alternative foregone ✅
Quick Trick: Multiply units chosen by opportunity cost per unit.
Common Mistakes:
MISTAKES- Using total motorcycles or cars instead of per unit ratio.
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