Subjects economics

Opportunity Cost 702463

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1. **State the problem:** Nadia's Neckties produces ascots and bowties. We want to determine the type of opportunity cost Nadia faces when producing these two goods. 2. **Understand opportunity cost:** Opportunity cost is what you give up to get something else. In production, it is how much of one good must be sacrificed to produce more of another. 3. **Analyze the data:** The table shows production choices: | Choice | Ascots | Bowties | |--------|--------|---------| | A | 32 | 0 | | B | 24 | 6 | | C | 16 | 12 | | D | 8 | 18 | | E | 0 | 24 | 4. **Calculate opportunity cost of bowties in terms of ascots:** From A to B: Ascots decrease by $32 - 24 = 8$, Bowties increase by $6 - 0 = 6$, so opportunity cost per bowtie = $\frac{8}{6} = \frac{4}{3} \approx 1.33$ ascots per bowtie. From B to C: Ascots decrease by $24 - 16 = 8$, Bowties increase by $12 - 6 = 6$, opportunity cost = $\frac{8}{6} = 1.33$ ascots per bowtie. From C to D: Ascots decrease by $16 - 8 = 8$, Bowties increase by $18 - 12 = 6$, opportunity cost = $\frac{8}{6} = 1.33$ ascots per bowtie. From D to E: Ascots decrease by $8 - 0 = 8$, Bowties increase by $24 - 18 = 6$, opportunity cost = $\frac{8}{6} = 1.33$ ascots per bowtie. 5. **Interpretation:** The opportunity cost of producing bowties in terms of ascots remains constant at approximately 1.33 ascots per bowtie. 6. **Conclusion:** Since the opportunity cost is constant, Nadia faces **constant opportunity costs** in the production of ascots and bowties. **Final answer:** A. constant