Economic Awareness - Sectors of Indian Economy
If a country produces 500 units of steel or 1000 units of coal with the same resources, what is the opportunity cost of producing 200 units of steel?
If a country produces 500 units of steel or 1000 units of coal with the same resources, what is the opportunity cost of producing 200 units of steel?
medium Q6 of 15
Step-by-Step Solution
Step 1: Understand opportunity cost per unit
Opportunity cost per unit of steel = total coal forgone / total steel produced = 1000 / 500 = 2 units of coal per steel unit.Step 2: Calculate total opportunity cost
For 200 units of steel, opportunity cost = 200 × 2 = 400 units of coal.Final Answer:
400 units of coal → Option AQuick Check:
Opportunity cost = next best alternative foregone ✅
Quick Trick: Multiply chosen units by opportunity cost per unit.
Common Mistakes:
MISTAKES- Confusing total coal with opportunity cost for chosen steel units.
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