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Figure: Bicycles and Radishes I
-(Figure: Bicycles and Radishes I) Look at The figure Bicycles and Radishes I. It shows the production possibility frontiers for two countries that produce only radishes and bicycles. The axes of the two graphs are measured in equivalent units. Country A is operating at point M, and country B is operating at point N. The opportunity cost of producing an additional ton of radishes would be greater in:
A)country A.
B)country B.
C)neither; the opportunity cost would be the same in both countries.
D)There is not enough information to answer the question.

Question

Use the following to answer questions :
Figure: Bicycles and Radishes I 
-(Figure: Bicycles and Radishes I) Look at The figure Bicycles and Radishes I. It shows the production possibility frontiers for two countries that produce only radishes and bicycles. The axes of the two graphs are measured in equivalent units. Country A is operating at point M, and country B is operating at point N. The opportunity cost of producing an additional ton of radishes would be greater in:
A)country A. 
B)country B. 
C)neither; the opportunity cost would be the same in both countries. 
D)There is not enough information to answer the question.

Quizplus · Accepted Answer

According to the law of increasing opportunity cost, as a country produces more of a good, the opportunity cost of producing an additional unit increases. Country A is already producing a lot of radishes and therefore the opportunity cost of producing an additional ton would be higher compared to country B, which is producing fewer radishes. Thus, the opportunity cost of producing an additional ton of radishes would be greater in country A.

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