Exhibit 33-6

-Refer to Exhibit 33-6. The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country A.

Question

Exhibit 33-6
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-Refer to Exhibit 33-6. The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country A.

Quizplus · Accepted Answer

The opportunity cost of producing 1 unit of wine in terms of cheese for country A is determined by the ratio of production possibilities. If country A can produce wine and cheese at a certain rate, the opportunity cost of 1 unit of wine is how much cheese could have been produced instead. Without specific numbers from Exhibit 33-6, we typically use the concept that if producing 1 unit of wine means giving up the production of 2 units of cheese, then the opportunity cost is 2 units of cheese for 1 unit of wine.

Exhibit 33-6 ​

Exhibit 33-6