Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in Germany is

Question

Quizplus · Accepted Answer

The opportunity cost of producing 20 cameras in Germany is the number of computers that could have been produced instead. Since 1 computer can be produced in the same time as 20 cameras, the opportunity cost is 1 computer.

Suppose That a Typical German Factory Can Produce 20 Cameras