Table 1 shows the production choices of a family-owned fruit farm. The farm has fixed land and workers, and the owner is considering an increase in strawber...

Assessment: Economics 9214 | Paper 2 Mock 01 | Written Paper 2 Subject: Economics - 9214

Question 1 Report

Table 1 shows the production choices of a family-owned fruit farm. The farm has fixed land and workers, and the owner is considering an increase in strawberry output.

(a) Calculate the opportunity cost of increasing strawberry output from 30 crates to 50 crates. Show your working. [1]

Answer Details

(a) Opportunity cost is the next best alternative forgone when a choice is made. Increasing strawberry output from 30 to 50 crates causes apple output to fall from 75 to 60 crates:

\[75 - 60 = 15\]

The opportunity cost is therefore 15 crates of apples. [1]

The answer must be expressed in terms of what is sacrificed, apples, rather than in terms of the extra 20 crates of strawberries produced.

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