Answer to Question #114606 in Microeconomics for Habib

Question #114606
With the same amount of resources, Firm A can purchase 60 hydraulically operated equipment or 120 mechanically operated equipment. What is Firm A's opportunity cost of purchasing 1 hydraulically operated equipment?
1
Expert's answer
2020-05-08T14:15:33-0400

Opportunity Cost of purchasing 60 hydraulic operated equipment is 120 mechanically operated equipment

Therefore Opportunity Cost of pushing one hydraulic equipment calculated as below:

The opportunity cost of One Hydraulic to Mechanical = "\\frac{60}{60}" = 1 ;


To mechanical equipment ="\\frac{120}{60}" =2


The opportunity cost of purchasing 1 hydraulic operated equipment is 2 of purchasing mechanically operated equipment



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