-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is
A) 1/2 unit of X per unit of Y.
B) 2/3 unit of X per unit of Y.
C) 2 units of X per unit of Y.
D) 3 units of X per unit of Y.

Question

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is
A) 1/2 unit of X per unit of Y. 
B) 2/3 unit of X per unit of Y. 
C) 2 units of X per unit of Y. 
D) 3 units of X per unit of Y.

Quizplus · Accepted Answer

The opportunity cost of producing an additional unit of Y is the amount of X that must be given up. If country B is producing 4 units of X and 6 units of Y, and assuming a linear production possibility frontier, the opportunity cost is calculated by the ratio of the loss in X to the gain in Y. Here, it is 2/3 unit of X per unit of Y.

-In the Table Above, Country B Is Producing 4 Units