Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes. Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes. Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem. a. True b. False

a. True

Explanation:

Opportunity cost is the forfeited benefits as a result of choosing one activity over the other.  It is the foregone gain for not selecting a particular option. Opportunity cost is valued as the cost of the next best alternative.

Both Jake and Ming-la can both write a poem in 90 minutes. The opportunity cost of writing a poem for both is changing oil.  In 90 minutes, Jake can do two oil changes while Ming-la can do three.  Therefore Jake's opportunity cost for writing a poem is two oil changes while Ming-la is three changes. Ming-la is faster, hence forfeits more by writing a poem. Jake, therefore, has a lower opportunity cost.

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