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Production and cost — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsProduction and cost2 Marks
Question
What is opportunity cost? Explain with the help of a numerical example.
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Answer

Opportunity cost is the next best alternative foregone in choosing a given alternative.
Suppose an economy produces only two goods X andY. Further suppose that by employing these resources fully and efficiently, the economy produces 1X+10Y. If the economy decides to produce 2X, it has to cut down production of Y by 2 units. Then 2Y is the opportunity cost of producing 1X.

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