Question

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production Possibility Frontier, some possible combinations of output for Germany could be:

A) 25 jets and 25 cars
B) 50 jets and 50 cars
C) 100 jets and 100 cars
D) 75 jets and 75 cars

Answer 1

The opportunity cost of producing one additional television set in Germany is 50 cars, while in Poland it is 100 cars. Germany has a comparative advantage in the production of televisions.

Step-by-step explanation:

The opportunity cost of producing one additional television set in Germany can be calculated by comparing the number of cars that Germany would need to give up in order to produce one additional television set. If the opportunity cost of producing a jet in Germany is 50 cars, then the opportunity cost of producing one additional television set would also be 50 cars.

In Poland, the opportunity cost of producing one additional television set can be calculated in a similar way. If the opportunity cost of producing a jet in Poland is 100 cars, then the opportunity cost of producing one additional television set would be 100 cars.

Based on these calculations, Germany has a comparative advantage in the production of televisions because it has a lower opportunity cost of producing them compared to Poland.