The following production possibilities schedule shows the quantities of soybeans and oil that can each be produced in Canada and Mexico with one unit of equivalent resources. TABLE 32-3 Refer to Table 32-3.Mexico would not gain by producing and exporting oil and importing soybeans unless it received

Question

The following production possibilities schedule shows the quantities of soybeans and oil that can each be produced in Canada and Mexico with one unit of equivalent resources.  TABLE 32-3 Refer to Table 32-3.Mexico would not gain by producing and exporting oil and importing soybeans unless it received

Quizplus · Accepted Answer

Based on the production possibilities schedule, the opportunity cost of producing one barrel of oil in Mexico is 3 bushels of soybeans (since Mexico can produce either 2 barrels of oil or 6 bushels of soybeans with one unit of resources). Therefore, Mexico would not gain by producing and exporting oil and importing soybeans unless it received more than 3 bushels of soybeans per barrel of oil. Choice C is the only option that meets this condition.

The Following Production Possibilities Schedule Shows the Quantities of Soybeans