Opportunity Cost Calculations

This video tutorial explains a fail-safe method for calculating opportunity cost using three steps: calculating the difference, writing the sentence, and dividing. It covers how to handle different formats, such as production possibility frontiers (PPF) and production per hour data, ensuring accurate opportunity cost calculations.

What are the three main steps in the fail-safe method for calculating Opportunity Cost?

• Write the Sentence, Calculate the Difference, Multiply

• Identify the Cost, Calculate the Difference, Write the Sentence

• Calculate the Difference, Write the Sentence, Divide

• Divide, Calculate the Difference, Write the Sentence

When calculating the difference between production points, what is the difference in TVs when moving from point A to B?

• 20 TVs

• 15 TVs

• 10 TVs

• 5 TVs

In the sentence 'The Opportunity Cost of 10 TVs is blank chairs', what value fills the blank?

• 20 chairs

• 10 chairs

• 5 chairs

• 2 chairs

How do you find the opportunity cost of one TV when given the opportunity cost of 10 TVs is 5 chairs?

• Multiply both numbers by 10

• Divide both numbers by 5

• Divide both numbers by 10

• Multiply both numbers by 5

If the opportunity cost of 5 chairs is 3 TVs, what is the opportunity cost of 1 chair?

• 2 TVs

• 5/3 of a TV

• 3/5 of a TV

• 1/3 of a TV

In the alternative method, what is the opportunity cost of 10 chairs for Tom?

• 5 TVs

• 2 TVs

• 3 TVs

• 1/5 of a TV

What is the opportunity cost of 1 chair for Tom when he can produce 10 chairs or 2 TVs per hour?

• 1/5 of a TV

• 5 TVs

• 1/2 of a TV

• 2 TVs

What should you do if your teacher requires a different method for calculating opportunity cost?

• Combine both methods

• Only use the teacher's method

• Use the fail-safe method as a backup

• Ignore the teacher's method

What is the opportunity cost of 3 TVs for Jill if she can produce 5 chairs or 3 TVs per hour?

• 1/5 of a chair

• 3/5 of a chair

• 2 chairs

• 5 chairs

What is the key benefit of writing the opportunity cost sentence and dividing?

• It ensures you always get the problem wrong

• It helps in understanding the concept of opportunity cost

• It makes the calculation more complex

• It is only useful for PPF format