For each watch the country of Marina produces, it gives up the opportunity to make 50 pounds of cheese. Cambria can produce one watch for every 100 pounds of cheese it produces. If specialization and trade were to occur between these two countries, which of the following is true of opportunity costs in the two countries?
A) The opportunity cost of producing watches is higher in Marina than in Cambria.
B) The opportunity cost of producing cheese is higher in Marina than in Cambria.
C) The opportunity cost of producing cheese is identical in both countries.
D) The opportunity cost of producing watches is lower in Cambria than in Marina.
E) In both countries, the opportunity cost of one watch is 150 pounds of cheese.
Correct Answer:
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