This table shows how much wine and cheese can be produced in Spain and Portugal with one unit of equivalent resources. Initially there is no trade. Once trade opens up, transportation costs are assumed to be zero. $$\begin{array}{l}
\begin{array} { | l | l | l | }
\hline & \begin{array} { l }
\text { Wine } \
\text { (units) }
\end{array} & \begin{array} { l }
\text { Cheese } \
\text { (units) }
\end{array} \
\hline \text { Spain } & 2 & 8 \
\hline \text { Portugal } & 2 & 3 \
\hline
\end{array}\
\text { TABLE 33- } 5
\end{array}$$
-Refer to Table 33- 5. The opportunity cost of cheese in terms of wine is

Question

This table shows how much wine and cheese can be produced in Spain and Portugal with one unit of equivalent resources. Initially there is no trade. Once trade opens up, transportation costs are assumed to be zero. $$\begin{array}{l}
\begin{array} { | l | l | l | } 
\hline & \begin{array} { l } 
\text { Wine } \
\text { (units) }
\end{array} & \begin{array} { l } 
\text { Cheese } \
\text { (units) }
\end{array} \
\hline \text { Spain } & 2 & 8 \
\hline \text { Portugal } & 2 & 3 \
\hline
\end{array}\
\text { TABLE 33- } 5
\end{array}$$
-Refer to Table 33- 5. The opportunity cost of cheese in terms of wine is

Quizplus · Accepted Answer

The opportunity cost of cheese in terms of wine is 1/4 in Spain. This is because Spain can produce 2 units of wine or 8 units of cheese with one unit of equivalent resources. So, the opportunity cost of 1 unit of cheese is 2/8 = 1/4 units of wine.

This Table Shows How Much Wine and Cheese Can Be