Ask Experts Questions for FREE Help!
  Advanced
Register  |  Log in  
   Ask    
 Answer  
  Help  

Ask QuestionsprogressAnswer QuestionsprogressBuild ReputationprogressBecome an Expert
 
Free Answers in 3 Easy Steps

Register Now
3 Steps

At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to:
  • Get free answers from experts in any of our 300+ topics.
  • Accept money for answers that you provide.
  • Communicate privately with other members (PM).
  • See fewer ads.

Home > Business & Careers > Economics   »   Is opportunity cost and price of X in terms of Y the same?

 
Question Tools Search this Question Display Modes
Question
 
 
#1  
Old May 10, 2008, 05:11 PM
SprinterJr
New Member
SprinterJr is offline
 
Join Date: May 2008
Posts: 1
SprinterJr See this member's comment history on his/her Profile page.
Is opportunity cost and price of X in terms of Y the same?

I have difficulty undrstanding the statement - "when the price of X in terms of Y is greater than the opportunity cost of Y, we are paying more than it really cost to produce X. In such a case we may say that the economy is inefficient."(Witztum. A, 2005)
This statement was made in relation to a linear PPF, where 100 units of labour was available that can produce either 100 units of good X or 200 units of good Y and of course any feasable combinations of both. There was a point A on the PPF of coordinates (25,150), which represents a productively efficient point and a point B under the PPF of coordinates (25,100) which represents an productively inefficient point. I know that the opportunity cost of X is 2 units of Y and that the opportunity cost of Y is 1/2 unit of X.

My problem come from understanding the price of X in term of Y and the concept of paying more than it really cost to produce X.

Can someone please help me to understand this important concept. Thanks for the help.

Reply With Quote
 
     



Question Tools Search this Question
Search this Question:

Advanced Search
Display Modes

 
Similar Sponsors

Similar Questions
Question Asker Topic Answers Last Post
cost of end. inv. and cost of goods sold under average cost sonyag1979 Accounting 1 Mar 12, 2008 01:59 AM
relevant cost, opportunity, and contribution to overheads and profits lequyet Finance & Accounting 0 Apr 22, 2007 12:06 PM
Capital Budgeting and opportunity cost of capital linalopez04 Accounting 1 Apr 8, 2007 08:06 PM
Opportunity cost with respect to cost of funds sayles_family Finance 0 Mar 15, 2007 04:45 PM
opportunity cost vs relevant cost twobytes Accounting 2 Apr 11, 2005 01:12 PM




Copyright ©2003 - 2007, Ask Me Help Desk.
All times are GMT -8. The time now is 02:10 AM.

Content Relevant URLs by vBSEO 3.0.0 RC6 © 2006, Crawlability, Inc.