Figure 3-18
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
-Refer to Figure 3-18.The opportunity cost of 1 cup for Bintu is
A)1/8 bowl.
B)1/4 bowl.
C)4 bowls.
D)8 bowls.

Question

Figure 3-18
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier  
-Refer to Figure 3-18.The opportunity cost of 1 cup for Bintu is
A)1/8 bowl. 
B)1/4 bowl. 
C)4 bowls. 
D)8 bowls.

Quizplus · Accepted Answer

Bintu's opportunity cost of 1 cup is 1/4 bowl, as she must give up 1/4 of a bowl to produce an additional cup. To make the best choice, we need to compare the opportunity costs of cups and bowls for both Bintu and Juba. If Bintu and Juba specialize in producing what they have a comparative advantage in, Bintu should produce cups (since her opportunity cost of 1 cup is lower) and Juba should produce bowls (since his opportunity cost of 1 bowl is lower). Therefore, the best choice is for Bintu to produce cups and Juba to produce bowls.

Figure 3-18 Bintu's Production Possibilities Frontier