Question

Exhibit 34-4 Country 1 Country 2 Good A Good B Good A Good B 200 0 75 0 160 20 60 15 120 40 45 30 80 60 30 45 40 80 15 60 0 100 0 75 Refer to Exhibit 34-4. The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2. 20B; 15B 2B; 1B 40B; 15B 1/2B; 1B 1/20B; 1/15B Previous Next

Answer 1

1/2B; 1B

Step-by-step explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

To determine the opportunity cost of both goods, we have to find the total quantities of goods A and B produced by each country

For country 1

Total quantity of good A = 600

Total quantity of good B = 300

Opportunity cost of producing good A = 300 / 600 = 0.5

For country 2

Total quantity of good A = 225

Total quantity of good B = 225

Opportunity cost of producing good A = 225 / 225 = 1

The table above isn't do clear. Please check the attached image for a more properly arranged table

I hope my answer helps you