Suppose that the average worker in Umbria can produce 5 kilos of beans or 3 bottles of wine. In Lazio, the average worker can produce 4 kilos of beans or 2 bottles of wine, What is the cost of a bottle of wine in Umbria and in Lazio?Multiple choice question.0.6 beans; 0.5 beans5 beans; 4 beans1.67 beans; 2 beans1.25 beans; 1.5 beans
Question
Suppose that the average worker in Umbria can produce 5 kilos of beans or 3 bottles of wine. In Lazio, the average worker can produce 4 kilos of beans or 2 bottles of wine, What is the cost of a bottle of wine in Umbria and in Lazio?Multiple choice question.0.6 beans; 0.5 beans5 beans; 4 beans1.67 beans; 2 beans1.25 beans; 1.5 beans
Solution
To find the cost of a bottle of wine in terms of beans, we need to calculate the opportunity cost. The opportunity cost is the cost of forgoing the next best alternative when making a decision. In this case, it's the amount of beans that could have been produced instead of a bottle of wine.
In Umbria, the average worker can produce 5 kilos of beans or 3 bottles of wine. So, for every bottle of wine produced, the worker could have produced 5/3 kilos of beans. Therefore, the cost of a bottle of wine in Umbria is 5/3 or approximately 1.67 beans.
In Lazio, the average worker can produce 4 kilos of beans or 2 bottles of wine. So, for every bottle of wine produced, the worker could have produced 4/2 or 2 kilos of beans. Therefore, the cost of a bottle of wine in Lazio is 2 beans.
So, the correct answer is "1.67 beans; 2 beans".
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