Exhibit 34-1 Country A Country B Good X Good Y Good X Good Y 90 0 30 0 60 30 20 20 30 60 10 40 0 90 0 60 Refer to Exhibit 34-1. The opportunity cost of one unit of X in country B is a. 0.33 units of Y. b. 20 units of Y. c. 2 units of Y. d. 1 unit of Y.

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Business

Morgan Valenzuela

21 February, 16:02

Exhibit 34-1 Country A Country B Good X Good Y Good X Good Y 90 0 30 0 60 30 20 20 30 60 10 40 0 90 0 60 Refer to Exhibit 34-1. The opportunity cost of one unit of X in country B is a. 0.33 units of Y. b. 20 units of Y. c. 2 units of Y. d. 1 unit of Y.

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Seth · Answer 1

c. 2 units of Y.

Explanation:

Country A Country B

Good X Good Y Good X Good Y

90 0 30 0

60 30 20 20

30 60 10 40

0 90 0 60

Country B's opportunity cost to produce 10 units of X is 20 units of Y, therefore the opportunity cost to produce 1 unit of X is 2 units of Y ( = 20 / 10 = 2).

Opportunity costs are the extra costs or lost benefits from choosing one activity or investment over another alternative. In this case, if Country B decides to produce 10 units of X, it will lose 20 units of Y.