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Mark and Julie Are Going to Sell Brownies and Cookies

question 153

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Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.What is Mark's opportunity cost to produce one brownie?


Definitions:

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Subsistence

The minimum level of essentials (such as food and shelter) necessary for an individual to survive.

Catch-Up Effect

The theory suggesting that less developed countries can grow at a faster rate than developed countries because they can adopt existing technologies and best practices.

Diminishing Returns

A principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

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