Suppose one factory produces residential windows and doors. The following scenarios describe various straight-line production possibilities boundaries

Question:

Suppose one factory produces residential windows and doors. The following scenarios describe various straight-line production possibilities boundaries for this factory. Each scenario describes the numbers of doors that could be produced in one day if all the factory’s resources were devoted to producing doors and the number of windows that could be produced in one day if all the factory’s resources were devoted to producing windows. For each scenario, calculate the opportunity cost to the factory owner of producing one extra door.

a. 1000 windows; 250 doors

b. 500 windows; 500 doors

c. 1200 windows; 400 doors

d. 942 windows; 697 doors

e. 450 doors; 600 windows

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...

Fantastic news! We've Found the answer you've been seeking!