Daily Output of Japan and United States

Table 18.2
-Refer to Table 18.2.The opportunity cost of a stereo in Japan is

Question

Daily Output of Japan and United States
  
Table 18.2
-Refer to Table 18.2.The opportunity cost of a stereo in Japan is

Quizplus · Accepted Answer

From the table, we can see that the opportunity cost of a stereo in Japan is 1/2 of a tractor (i.e. 2 stereos = 1 tractor). Therefore, the best choice is to produce and trade stereos, since Japan's opportunity cost of producing stereos is lower than the United States' opportunity cost.