-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is
A) 4 units of Y.
B) 2 units of Y.
C) 1 unit of Y
D) 3/2 units of Y.

Question

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is
A) 4 units of Y. 
B) 2 units of Y. 
C) 1 unit of Y 
D) 3/2 units of Y.

Quizplus · Accepted Answer

The opportunity cost of producing an additional unit of X is the amount of Y that must be given up. If country B is producing 4 units of X and 6 units of Y, the opportunity cost is calculated by the ratio of the loss in Y to the gain in X. If the production possibility frontier is linear, the opportunity cost is constant, and here it is 3/2 units of Y per additional unit of X.

-In the Table Above, Country B Is Producing 4 Units