Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of beer is

A) the 2 gallons of beer that must be forgone.
B) the 2 gallons of wine that must be forgone.
C) the 0.5 gallons of beer that must be forgone.
D) the additional 0.5 gallons of beer that can be produced.

Marginal Rate

The rate at which one variable changes with respect to a slight change in another variable, often used in the context of taxes or production.

Transformation

The process of changing the structure, appearance, or character of something, often seen in economic contexts as shifts in production or technology.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, a fundamental concept in economics that captures the essence of trade-offs.