Question
Asked Jan 26, 2020
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Consider the following production possibilities table that shows different combinations of two goods that can be produced with given resources:

 

Shirts

Corn

A

0

16

B

2

12

C

4

8

D

6

4

E

8

0

When the country moves from point A to point B, the opportunity cost of producing 1 shirt is  bushels of corn.

When the country moves from point C to point D, the opportunity cost of producing 1 shirt is  bushels of corn.

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Expert Answer

Step 1

Opportunity Cost: It is the cost of the next best alternative forgone for doing an action.

The formula for the calculation of opportunity cost is as follows:

Economics homework question answer, step 1, image 1
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Step 2

A) When country moves from point A to B, the opportunity cost of p...

Economics homework question answer, step 2, image 1
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