BONUS QUESTION #1 4 points a) If it takes 50 farm workers to harvest one ton of

Question

BONUS QUESTION #1 4 points a) If it takes 50 farm workers to harvest one ton of strawberries and 10 farm workers to harvest one ton of wheat, what is the opportunity cost (in terms of the number of tons of wheat harvested) of harvesting 5 tons of strawberries? b) What is the opportunity cost of harvesting 10 tons of wheat? BONUS QUESTION #2 4 points a) If an American tourist can obtain one euro for $1.25, what part of a euro would a European tourist have to give up for one dollar? At the above exchange rate how many dollars would an American have to pay for a new BMW automobile costing 30,000 euros.? b)

Explanation / Answer

(Bonus Question #1)

(a) To harvest 1 ton of strawberry, 50 workers are required. So, to harvest 5 tons of strawberries, (50 x 5) = 250 workers are needed.

Using 1 worker,

Tons of strawberry harvested = 1/250 = 0.004

Tons of wheat harvested = 1/10 = 0.1

Opportunity cost of strawberry = 0.1 / 0.004 = 25 tons of wheat

(b) To harvest 1 ton of wheat, 10 workers are required. So, to harvest 10 tons of wheat, (10 x 10) = 100 workers are needed.

Using 1 worker,

Tons of strawberry harvested = 1/50 = 0.02

Tons of wheat harvested = 1/100 = 0.01

Opportunity cost of wheat = 0.02 / 0.01 = 2 tons of strawberry

NOTE: As per Answering Policy, 1st question has been answered.

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