For an economy which last year produced only two commodities X and Y, the real cost of the quantity of X which it produced can be measured by the?

Assessment: JAMB UTME - Economics - 1992 Subject: Economics

Question 1 Report

For an economy which last year produced only two commodities X and Y, the real cost of the quantity of X which it produced can be measured by the?
Answer Details
The real cost of producing a commodity refers to the opportunity cost, which is the value of the next best alternative foregone. In this case, the real cost of the quantity of X produced can be measured by the total amount of Y that the economy could have produced with the same resources used to produce X. This means that producing X comes at the cost of the forgone production of Y, and the real cost of X is the amount of Y that could have been produced instead. Therefore, the answer is "total amount of Y it could have produced."
Read lesson note on The Theory Of Production (JAMB)
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