Assume a Society Can Produce Either Beer or Wine

question 25

Multiple Choice

Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of beer is

• A) the 2 gallons of beer that must be forgone.
• B) the 2 gallons of wine that must be forgone.
• C) the 0.5 gallons of beer that must be forgone.
• D) the additional 0.5 gallons of beer that can be produced.