Suppose nation A produces only two goods, apples and oranges . If nation A produces only apples, it can make 12 apples per day. If nation A produces only oranges, it can make 36 oranges per day. If the country has a constant production trade- off between apples and oranges, then the opportunity cost of one apple in nation A is:

Question

Quizplus · Accepted Answer

To find the opportunity cost of one apple, we need to determine how many oranges nation A must give up to produce one apple. Nation A can produce either 12 apples or 36 oranges per day. This means that for every apple it produces, it must give up the production of 3 oranges (36 oranges ÷ 12 apples). Therefore, the opportunity cost of one apple in nation A is 3 oranges.

Suppose Nation a Produces Only Two Goods, Apples and Oranges