If productivity in the German computer industry grows faster than it does in the Japanese computer industry, the opportunity cost of each computer produced in Japan increases relative to the opportunity cost of a computer produced in Germany.

Question

Quizplus · Accepted Answer

When productivity in the German computer industry grows faster than that of the Japanese computer industry, the production possibilities frontier (PPF) of Germany shifts outward, allowing for more efficient production of computers. This results in a decrease in the opportunity cost of producing computers in Germany. As a result, the opportunity cost of producing computers in Japan relative to Germany increases, making it more costly for Japan to produce computers.

If Productivity in the German Computer Industry Grows Faster Than