Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts.
-Refer to Figure 2-13. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

Question

Figure 2-13  Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts.
-Refer to Figure 2-13. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

Quizplus · Accepted Answer

The opportunity cost of producing 1 ton of coconuts in Guatemala is 1/2 of a ton of pineapples. This is because, according to the production possibilities curve in Figure 2-13, Guatemala can produce either 1 ton of coconuts or 2 tons of pineapples. Therefore, if Guatemala chooses to produce 1 ton of coconuts, it must give up the opportunity to produce 2 tons of pineapples.

Figure 2-13 Figure 2-13 Shows the Production Possibilities Frontiers