Figure 3-23
The graph below represents the various combinations of ham and cheese (in pounds)that the nation of Bonovia could produce in a given month.
-Refer to Figure 3-23.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if
A)Cropitia can produce more than 400 pounds of ham per month.
B)Cropitia can produce more than 320 pounds of cheese per month.
C)Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.
D)Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.

Question

Figure 3-23
The graph below represents the various combinations of ham and cheese (in pounds)that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-23.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if
A)Cropitia can produce more than 400 pounds of ham per month. 
B)Cropitia can produce more than 320 pounds of cheese per month. 
C)Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese. 
D)Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.

Quizplus · Accepted Answer

Cropitia has a comparative advantage in producing ham if its opportunity cost of producing a pound of ham is less than Bonovia's opportunity cost. Looking at the graph, if Cropitia produces 200 pounds of cheese, it has to give up producing 250 pounds of ham, which gives an opportunity cost of 1.25 pounds of cheese for each pound of ham. On the other hand, if it produces 50 pounds of cheese, it has to give up producing 100 pounds of ham, which gives an opportunity cost of 0.5 pounds of cheese for each pound of ham. Therefore, Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.

Figure 3-23 the Graph Below Represents the Various Combinations of Ham and Ham