Figure 18.3

-Refer to Figure 18.3. The opportunity cost of producing scooters in Livonia is

Question

Figure 18.3
 
-Refer to Figure 18.3. The opportunity cost of producing scooters in Livonia is

Quizplus · Accepted Answer

The opportunity cost of producing one scooter in Livonia is 0.8 pogo sticks (4/5). Therefore, the opportunity cost of producing 1 pogo stick is 1.25 scooters (1/0.8). So, if a country in Livonia decides to produce 1 scooter, it gives up the opportunity to produce 1.25 pogo sticks. Thus, the best choice for this country depends on the relative value of 1 scooter compared to 1.25 pogo sticks. Based on the information given (assuming pogo sticks and scooters are the only goods being produced), we cannot make that determination.

Figure 18.3 -Refer to Figure 18.3. the Opportunity Cost of Producing Scooters