Answer:
b. $50
Explanation:
The total budget of $800 for restaurant meals and fast food can buy as many units or either based on the unit cost of each.
Given that the family can buy 16 restaurant meals if they don't buy any fast-food meals, it means that the budget of $800 can be used to purchase 16 units of restaurant means at a cost per unit of
= $800/16
= $50
As such, the cost of a restaurant meal for the family is $50.
Answer:
Depending on how you interpret this question, the answer can be either B) $50 per restaurant meal or E) 3 fast food meals per restaurant meal. I interpret this question as the opportunity cost, so to me the answer should be E.
Explanation:
There are two ways to interpret this question, the price of the meal or the cost of eating a restaurant meal.
The price of the restaurant meal = $800 / 16 = $50 per restaurant meal, but the cost of the meal in economics is measured by the opportunity cost.
The opportunity cost of a good is the cost incurred (or benefits lost) from choosing one good (or investment) over another alternative one.
The opportunity cost of eating a restaurant meal instead of any fast food meal = price of the restaurant meal / price of fast food meal
the price of a fast food meal = $800 / 50 = $16 per fast food meal
The opportunity cost = $50 / $16 = 3.1 ≈ 3 fast food meals per restaurant meal.
So depending on how you interpret this question, the answer can be either B) $50 per restaurant meal or E) 3 fast food meals per restaurant meal.
*In economics, the price ≠ cost
