Suppose Nation A produces only two goods,apples and oranges.If Nation A produces only apples,it can make 12 apples per day.If Nation A produces only oranges,it can make 36 oranges per day.If the country has a constant production trade-off between apples and oranges,then the opportunity cost of one orange in Nation A is

Question

Quizplus · Accepted Answer

The opportunity cost of one orange is equal to the number of apples that must be given up to produce one orange. Since Nation A can produce 12 apples per day or 36 oranges per day, the opportunity cost of one orange is equal to 12/36 or 0.33 apples. Therefore, the best choice is A.

Suppose Nation a Produces Only Two Goods,apples and Oranges