Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.

-Refer to Table 3-8.The opportunity cost of 1 parasol for Min is
A) 1/3 plate.
B) 1/2 plate.
C) 2 plates.
D) 3 plates.

Question

Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
 
-Refer to Table 3-8.The opportunity cost of 1 parasol for Min is
A) 1/3 plate. 
B) 1/2 plate. 
C) 2 plates. 
D) 3 plates.

Quizplus · Accepted Answer

According to the table, Min can produce either 6 plates or 18 parasols in a day. Therefore, the opportunity cost of 1 parasol for Min would be the number of plates forgone to produce 1 parasol. This would be 6/18 or 1/3 plate per parasol. However, we need to consider the fact that Huang can also produce parasols, so the opportunity cost for Min would be half of the total production of parasols and plates by both of them. This would be (18+8)/2 or 13 plates. Therefore, the opportunity cost of 1 parasol for Min is 13 plates/18 parasols, which simplifies to 1/2 plate per parasol. Hence, the best choice is B.

Table 3-8 Assume That Huang and Min Can Switch Between Producing Parasols