The production possibilities for country X are either 6,000 bushels of soybeans or 10,000 bushels of wheat. The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000 bushels of wheat. Which of the following is true?

Question

Quizplus · Accepted Answer

Country Y has to give up 2,000 bushels of soybeans to produce 4,000 bushels of wheat, which is a 1:2 ratio. Country X has to give up 6,000 bushels of soybeans to produce 10,000 bushels of wheat, a 3:5 ratio. Thus, the opportunity cost of producing wheat is lower in country Y, as they give up less soybeans per bushel of wheat produced compared to country X.

The Production Possibilities for Country X Are Either 6,000 Bushels