Use the following to answer question(s): Production Possibilities Schedule for Two Commodities

-(Exhibit: Production Possibilities Schedule for Two Commodities) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of commodity X each country would have to forgo to produce the additional units of commodity Y indicated.Further assume that the only input is labor and that it remains fully employed.The cost to the United States of producing an additional unit of Y is _______ units of X.

Question

Use the following to answer question(s): Production Possibilities Schedule for Two Commodities
 
-(Exhibit: Production Possibilities Schedule for Two Commodities) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of commodity X each country would have to forgo to produce the additional units of commodity Y indicated.Further assume that the only input is labor and that it remains fully employed.The cost to the United States of producing an additional unit of Y is _______ units of X.

Quizplus · Accepted Answer

The cost to the United States of producing an additional unit of Y, assuming constant costs, is represented by the opportunity cost. The opportunity cost is the amount of one good a country has to forgo to produce an additional unit of another good. Given the assumption of constant costs and the information provided, the correct answer is the number of units of X that must be forgone to produce an additional unit of Y, which is 6 units of X.

Use the Following to Answer Question(s): Production Possibilities Schedule for Two