Saved The table below presents the choices faced by a feudal

Saved The table below presents the choices faced by a feudal lord in ancient China. Feudal China\'s Production Possibilities Terracotta Statues Porcelain Vases 35 45 6 5 4 65 75 What is the opportunity cost of producing the 5th terracotta statue? O 5 porcelain vases O 20 porcelain vases O 30 porcelain vases O 10 porcelain vases

Solution

Opportunity cost is the value of the next best alternative foregone.

Answer is 10 porcelain vases.

6 procelain vases = 45 terracota statues

5 procelain vases = 55 terracota statues

Opportunity cost of producing 5th terracota statue is 55-45 = 10.