Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-26. Japan's opportunity cost of one car is
A)1/5 airplane and Korea's opportunity cost of one car is 1/3 airplane.
B)1/5 airplane and Korea's opportunity cost of one car is 3 airplanes.
C)5 airplanes and Korea's opportunity cost of one car is 1/3 airplane.
D)5 airplanes and Korea's opportunity cost of one car is 3 airplanes.

Question

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
​ 
-Refer to Table 3-26. Japan's opportunity cost of one car is
A)1/5 airplane and Korea's opportunity cost of one car is 1/3 airplane. 
B)1/5 airplane and Korea's opportunity cost of one car is 3 airplanes. 
C)5 airplanes and Korea's opportunity cost of one car is 1/3 airplane. 
D)5 airplanes and Korea's opportunity cost of one car is 3 airplanes.

Quizplus · Accepted Answer

Opportunity cost is calculated as the value of the next best alternative forgone. Japan produces 5 cars in exchange for 1 airplane. Therefore, the opportunity cost of one car for Japan is 1/5 airplane. Korea produces 3 cars in exchange for 1 airplane. Therefore, the opportunity cost of one car for Korea is 1/3 airplane. Hence, option A is the correct answer.

Table 3-26 Assume That Japan and Korea Can Switch Between Producing Cars