If Troy is currently producing 900 bolts and wishes to increase bolt production to 1,300, what will be the trade-off, or opportunity cost, in terms of wing nuts

Respuesta :

Answer:

we are missing Troy's production possibilities frontier, but we can make one up that can serve as an example:

Troy's total production:

bolts        Δ in bolts                   wing nuts       Δ in wing nuts

500              200                            1,900                 -300

700              200                            1,600                 -300

900              200                            1,300                 -300

1,100             200                           1,000                 -300

1,300            200                              700                 -300

1,500            200                              400                 -300

Troy's opportunity cost of producing 1 bolt is 300 wing nuts /200 bolts = 1.5 wing nuts.

If Troy increases the production of bolts by 1,300 - 900 = 400 units, then the trade off will be 400 x 1.5 = 600 wing nuts.

Your numbers are probably different, but you can adjust them using the same formula.