Table 3-4
$\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\
\hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \
\hline \text { England } & 3 & 2 & 13.3 & 20 \
\hline \text { Spain } & 1 & 5 & 40 & 8 \
\hline
\end{array}$
-Refer to Table 3-4.The opportunity cost of one unit of bread in England is:
A)2/3 unit of cheese
B)two units of cheese
C)one unit of cheese
D)1/2 unit of cheese

Question

Table 3-4
 $\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\
\hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \
\hline \text { England } & 3 & 2 & 13.3 & 20 \
\hline \text { Spain } & 1 & 5 & 40 & 8 \
\hline
\end{array}$
-Refer to Table 3-4.The opportunity cost of one unit of bread in England is:
A)2/3 unit of cheese
B)two units of cheese
C)one unit of cheese
D)1/2 unit of cheese

Quizplus · Accepted Answer

The opportunity cost of producing one unit of bread in England is determined by how much cheese must be forgone to produce that additional unit of bread. If the table suggests that England can produce bread and cheese at a certain rate, the opportunity cost is calculated by the ratio of production of cheese to bread. Without the specific numbers from Table 3-4, the general principle is that if England sacrifices X units of cheese to produce one more unit of bread, then X is the opportunity cost of producing one unit of bread in terms of cheese. Given the choices, if A is correct, it means for every unit of bread produced, England forgoes 2/3 unit of cheese.

Table 3-4 -Refer to Table 3-4