Reference: Ref 2-4 (Figure: PPF Mexico & U.S.) Use the figure in which both Mexico and the United States each have 24 units of labor. The opportunity costs of producing one shirt are:
A) one computer for Mexico and 1/6 of a computer for the United States.
B) 1/6 of a computer for Mexico and one computer for United States.
C) one computer for both Mexico and the United States.
D) 1/6 of computer for both Mexico and the United States.

Question

Reference: Ref 2-4 (Figure: PPF Mexico & U.S.) Use the figure in which both Mexico and the United States each have 24 units of labor. The opportunity costs of producing one shirt are:
A) one computer for Mexico and 1/6 of a computer for the United States. 
B) 1/6 of a computer for Mexico and one computer for United States. 
C) one computer for both Mexico and the United States. 
D) 1/6 of computer for both Mexico and the United States.

Quizplus · Accepted Answer

According to the figure, Mexico can produce 4 shirts with all of its labor, or alternatively, produce 3 shirts and 1/6 of a computer. Therefore, the opportunity cost of producing one shirt is 1/6 of a computer. Similarly, the United States can produce 8 computers with all of its labor, or alternatively, produce 6 computers and 1 shirt. Therefore, the opportunity cost of producing one shirt is one computer. Thus, the correct answer is option B.