Question

Suppose the resources of Country A would allow it to produce either 150 million pounds of coffee or 100 million bushels of corn in a given period of time. Similarly the resources of Country B would allow it to produce 200 million pounds of coffee or 200 million bushels of com in the same amount of time.

Calculate the opportunity cost of coffee in terms of corn for each county._____

Answer 1

The opportunity cost of coffee in terms of corn for Country A is 2/3 bushels of corn per pound of coffee, while for Country B, it is 1 bushel of corn per pound of coffee.

Step-by-step explanation:

The student asked: "Calculate the opportunity cost of coffee in terms of corn for each country." To calculate the opportunity cost for Country A and Country B, we need to compare the amount of corn that can be produced instead of coffee.

For Country A, the production possibilities are 150 million pounds of coffee or 100 million bushels of corn. Therefore, the opportunity cost of producing one pound of coffee is 2/3 bushels of corn (100 million bushels of corn / 150 million pounds of coffee).

For Country B, with the capabilities of producing either 200 million pounds of coffee or 200 million bushels of corn, the opportunity cost of one pound of coffee is 1 bushel of corn (200 million bushels of corn / 200 million pounds of coffee).