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. Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision?
A)3 airplanes
B)6 airplanes
C)16 airplanes
D)150 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. Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision?
A)3 airplanes 
B)6 airplanes 
C)16 airplanes 
D)150 airplanes

Quizplus · Accepted Answer

Looking at the table, if Korea produces 18 more cars, it will reduce its production of airplanes by 6. This is the opportunity cost of the decision, as they could have produced 6 fewer cars and instead produced 6 more airplanes. Therefore, the opportunity cost is 6 airplanes.

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