Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

-Refer to the scenario above.The opportunity cost per dollar of value added in stitching shoes by workers in Country Y is ________.

Question

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.
 
-Refer to the scenario above.The opportunity cost per dollar of value added in stitching shoes by workers in Country Y is ________.

Quizplus · Accepted Answer

The opportunity cost per dollar of value added in stitching shoes in Country Y is calculated by comparing the value added by stitching shoes to the value added by the alternative activity (e.g., making shirts). If the scenario suggests that for every dollar value added by stitching shoes, the workers could have added $2 value by engaging in the alternative activity, then the opportunity cost is $2 for every dollar of value added in stitching shoes.

Scenario: a Shoe Manufacturer Has Factories in Two Countries, Country