Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Japan's opportunity cost of one car is
A) 1/5 airplane and Korea's opportunity cost of one car is 1/3 airplane.
B) 1/5 airplane and Korea's opportunity cost of one car is 3 airplanes.
C) 5 airplanes and Korea's opportunity cost of one car is 1/3 airplane.
D) 5 airplanes and Korea's opportunity cost of one car is 3 airplanes.

Question

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.Japan's opportunity cost of one car is
A) 1/5 airplane and Korea's opportunity cost of one car is 1/3 airplane. 
B) 1/5 airplane and Korea's opportunity cost of one car is 3 airplanes. 
C) 5 airplanes and Korea's opportunity cost of one car is 1/3 airplane. 
D) 5 airplanes and Korea's opportunity cost of one car is 3 airplanes.

Quizplus · Accepted Answer

Japan's opportunity cost of one car is found by dividing the cost of producing one car (5 airplanes) by the cost of producing one airplane (1). So, 5/1 = 5 airplanes. Therefore, Japan's opportunity cost of one car is 5 airplanes. Korea's opportunity cost of one car is found in a similar way by dividing the cost of producing one car (3 airplanes) by the cost of producing one airplane (1). So, 3/1 = 3 airplanes. Therefore, Korea's opportunity cost of one car is 3 airplanes. Therefore, choice A is correct.

Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars