Question

Exhibit 34-5 Country 1 Country 2 Good A Good B Good A Good B 100 0 75 0 80 10 60 30 60 20 45 60 40 30 30 90 20 40 15 120 0 50 0 150 Refer to Exhibit 34-5. The opportunity cost of one unit of good B is __________ for country 1 and __________ for country 2. Group of answer choices 20A; 15A 1/20A; 1/15A 10A; 15A 1/2A; 1A 2A; 1/2A

Answer 1

2A; 1/2A

Step-by-step explanation:

Opportunity cost or implicit is the cost of the option forgone when one alternative is chosen over other alternatives.

To determine opportunity cost, add the total amount of good A and B produced by each country

Total quantity of good A produced by country 1 = 300

Total quantity of good b produced by country 1 = 150

opportunity cost of producing good B = 300A/ 150 = 2A

Total quantity of good A produced by country 2 = 225

Total quantity of good b produced by country 2 = 450

opportunity cost of producing good B = 225 / 450 = 0.5A