Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:
If a farmer produces wheat, which fetches $200 per quintal, instead of producing rice which would have fetched $180 per quintal and gram $160 per quintal. What is the opportunity cost of the farmer of producing wheat?
Options:
$ 180 + $ 160  =  $ 340
$180
$ 160
None of these
Correct Answer:
$180
Explanation:

Opportunity cost is the next best opportunity forgone.