Figure 18.3

-Refer to Figure 18.3. In autarky, the maximum amount of scooters that Livonia can produce is

Question

Figure 18.3
 
-Refer to Figure 18.3. In autarky, the maximum amount of scooters that Livonia can produce is

Quizplus · Accepted Answer

In autarky, Livonia can produce either 120 units of butter or 80 units of scooters. The opportunity cost of producing one unit of scooters is 1.5 units of butter (120/80), while the opportunity cost of producing one unit of butter is 2/3 units of scooters (80/120). Therefore, the production of scooters should be prioritized as it has a lower opportunity cost.

Figure 18.3 -Refer to Figure 18.3. in Autarky, the Maximum Amount of the Maximum