Question

The Italy can produce 20 Gas turbines and 60 Tyres. France can produce 80 Gas turbines and 30 Tyres.

a). What is the opportunity
cost of producing Gas turbines in Italy? ______ tyres.
b). What is the opportunity cost of producing Tyres in
France ? _______ Gas turbines.

Answer 1

1. 60 Tyres

2. 80 Gas Turbines

Step-by-step explanation:

Given that the Opportunity cost is an economics term that is used in describing the cost of an alternative that must be forgone to continue or proceed with a certain activity.

Hence, in this case, considering the available information in the question, the correct answer is that the opportunity cost of producing Gas turbines in Italy is 60 Tyres.

At the same time the opportunity cost of producing Tyres in France 80 Gas turbines.