Suppose Nation A produces only two goods,apples and oranges.If Nation A produces only apples,it can make 16 apples per day.If Nation A produces only oranges,it can make 4 oranges per day.If the country has a constant production trade-off between apples and oranges,then the opportunity cost of one apple in Nation A is

Question

Quizplus · Accepted Answer

The opportunity cost of one apple is the amount of oranges that must be given up to produce one more apple. Since Nation A can produce 16 apples or 4 oranges per day, the opportunity cost of one apple is 4 oranges / 16 apples = 0.25 oranges.

Suppose Nation a Produces Only Two Goods,apples and Oranges