Table 3-11
Assume that Bahamas and Denmark can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-11. Bahamas's opportunity cost of one cooler is
A)0.5 radios, and Denmark's opportunity cost of one cooler is 0.125 radios.
B)0.5 radios, and Denmark's opportunity cost of one cooler is 8 radios.
C)2 radios, and Denmark's opportunity cost of one cooler is 0.125 radios.
D)2 radios, and Denmark's opportunity cost of one cooler is 8 radios.

Question

Table 3-11
Assume that Bahamas and Denmark can switch between producing coolers and producing radios at a constant rate.
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-Refer to Table 3-11. Bahamas's opportunity cost of one cooler is
A)0.5 radios, and Denmark's opportunity cost of one cooler is 0.125 radios. 
B)0.5 radios, and Denmark's opportunity cost of one cooler is 8 radios. 
C)2 radios, and Denmark's opportunity cost of one cooler is 0.125 radios. 
D)2 radios, and Denmark's opportunity cost of one cooler is 8 radios.

Quizplus · Accepted Answer

The opportunity cost of producing one unit of a good is found by dividing the production of the other good by the production of the first good. For the Bahamas, producing one cooler costs 0.5 radios (given the production possibilities), and for Denmark, producing one cooler costs 0.125 radios, according to the same logic.

Table 3-11 Assume That Bahamas and Denmark Can Switch Between Producing Coolers