Question 4 (a)(ii)

Aditi's opportunity cost of making one poster

2 marks

Time to write: About 4 minutes
Topic: Scarcity, opportunity cost and the PPF

Question

Question 4 (a)(ii) · 2 marks

Aditi and Kabir are both students who work for the college fest. Aditi and Kabir are able to work for only 5 hours a day. The college President tells them that they must create 180 posters for display and call 240 companies to raise funds in next 10 days. The table below gives the numbers of posters and calls that Aditi and Kabir can work on in a given number of hours:

Hours spent	Aditi (Poster)	Aditi (Calls)	Kabir (Poster)	Kabir (Calls)
1	2	5	5	2
2 hours	4	10	10	4
3	6	15	15	6
4 hours	8	20	20	8
5	10	25	25	10

What would be the opportunity cost to Aditi of creating one poster?

Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

4 minfor 2 marks

Write it in this order

1 Aditi's output per hour from the table 1 mark 2 min
2 Opportunity cost of one poster in calls 1 mark 2 min

Try it first. About 4 minutes for 2 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

What one hour gives Aditi. The opportunity cost of making something is what has to be given up to make it, the best alternative use of the same time. In the table Aditi makes 4 posters or 10 calls in 2 hours (8 posters or 20 calls in 4 hours), so one hour of her time gives either 2 posters or 5 calls.

Opportunity cost of a poster. To make 2 posters she gives up the 5 calls she could have made in that hour, so one poster costs her 5 ÷ 2 = 2.5 calls. The ratio is the same from either row of the table: 10 ÷ 4 = 20 ÷ 8 = 2.5. Opportunity cost is measured as the amount of the other output given up for each unit made.

Answer. Aditi's opportunity cost of creating one poster is 2.5 phone calls (equivalently, one call costs her 0.4 of a poster).

Where the 2 marks sit

#	Component	Marks
1	Aditi's output per hour from the table	1
2	Opportunity cost of one poster in calls	1
	Total	2

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