Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. The lowest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is

Question

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers.  The lowest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is

Quizplus · Accepted Answer

The best choice is producing 20 B-1 bombers and 40 Stealth bombers because it has the lowest opportunity cost for both B-1 and Stealth bombers, which is 0.5 Stealth bombers per B-1 bomber. Any other combination would result in a higher opportunity cost for at least one of the types of bombers.

Table 11 Shows the Hypothetical Trade-Off Between Different Combinations of Stealth