Table 18.1
Daily Output of Russia and Panama

-Refer to Table 18.1. The opportunity cost of a glove in Panama is

Question

Table 18.1
Daily Output of Russia and Panama
 
-Refer to Table 18.1. The opportunity cost of a glove in Panama is

Quizplus · Accepted Answer

To calculate the opportunity cost of a glove in Panama, we need to compare it with the opportunity cost of a glove in Russia.

In Panama, producing a glove requires giving up 3 hats (1 glove/0.75 hats). 
In Russia, producing a glove requires giving up 2 hats (1 glove/0.5 hats).

Therefore, the opportunity cost of a glove in Panama is higher than in Russia, indicating that Panama has a comparative disadvantage in producing gloves.

Hence, it would be best for Panama to specialize in producing hats and import gloves from Russia.

Table 18.1 Daily Output of Russia and Panama