Krugman's Economics For The Ap® Course
Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
Question
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Chapter 4, Problem 2MCQ
To determine

The question requires us to determine the opportunity cost of wheat for country A.

Expert Solution & Answer
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Explanation of Solution

The following graph represents the production of wheat and textile in country A and country B:

    CountryWheat (bushels) Textile
    Country A200100
    Country B100150

From the given table:

The opportunity cost of producing a bushel of wheat in country A

  =100200=12unit of textile

Thus, option “a” is correct.

Economics Concept Introduction

The country with a lower opportunity cost of producing a product will have a comparative advantage in producing that product. A lower opportunity cost indicates a less quantity of foregone goods a country has to sacrifice to produce a particular product.

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