Canada must give up the production of 300 motorcycles to produce 15 additional SUVs with the same resources.The opportunity cost of producing 100 motorcycles is _____ SUV(s).

Question

Quizplus · Accepted Answer

To produce 15 additional SUVs, Canada has to give up 300 motorcycles. Therefore, the opportunity cost of producing 1 motorcycle is equivalent to 1/20th of an SUV (300 motorcycles divided by 15 SUVs).

Thus, the opportunity cost of producing 100 motorcycles would be:

100 motorcycles x (1/20 SUV/motorcycle) = 5 SUVs

So, Canada would have to give up the production of 5 SUVs to produce 100 motorcycles. Therefore, the answer is B) 5.

Canada Must Give Up the Production of 300 Motorcycles to Produce