Suppose country Zoravia can produce 1 unit of good X every 2 hours and 1 unit of good Y every 30 minutes. Another country Alaine needs an hour each to produce 1 unit of X and 1 unit of Y. Which of the following statements must be true?
A) Alaine is more productive in the production of both goods X and Y.
B) Zoravia has a lower opportunity cost in the production of good Y.
C) Alaine has to give up 4 units of Y to produce 1 unit of X.
D) Zoravia has no comparative advantage in the production of either good.

Question

Quizplus · Accepted Answer

Zoravia has a lower opportunity cost in the production of good Y because it can produce 1 unit of Y in 30 minutes compared to 1 unit of X in 2 hours, meaning it gives up less of X to produce Y than Alaine, which has to give up 1 unit of X for every unit of Y due to the equal production times for both goods.

Suppose Country Zoravia Can Produce 1 Unit of Good X