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In a city, there are two car factories, Factory A and Factory B. Factory A can produce 100 red cars or 200 yellow cars per batch, while Factory B can produce 50 red cars or 150 yellow cars per batch. Which factory has the higher opportunity cost of producing one yellow car?

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For Factory A, opportunity cost of 1 yellow car = 100 red cars / 200 yellow cars = 0.5 red cars. For Factory B, it is 50 red cars / 150 yellow cars = 0.33 red cars. 0.5 is higher.

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