Table 2-11

Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-11.What is Ireland's opportunity cost of producing one motorcycle?
A)0.2 guitar
B)5 guitars
C)8 guitars
D)32 guitars

Question

Table 2-11
  
Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-11.What is Ireland's opportunity cost of producing one motorcycle?
A)0.2 guitar 
B)5 guitars 
C)8 guitars 
D)32 guitars

Quizplus · Accepted Answer

Ireland's opportunity cost of producing one motorcycle is the number of guitars it could have produced with the same amount of labor hours. From the table, Ireland's opportunity cost for one motorcycle is 5 guitars, which means it has to give up producing 5 guitars to produce one motorcycle. Therefore, Ireland should focus on producing guitars instead of motorcycles because it has a comparative advantage in guitar production.

Table 2-11 Table 2-11 Shows the Number of Labor Hours Required to of Labor