Table 3-4

-Refer to Table 3-4. What is the opportunity cost of 1 birdhouse for Manitoba?
A)3/4 basket.
B)1 basket.
C)4/3 baskets.
D)3 baskets.

Question

Table 3-4
 
-Refer to Table 3-4. What is the opportunity cost of 1 birdhouse for Manitoba?
A)3/4 basket. 
B)1 basket. 
C)4/3 baskets. 
D)3 baskets.

Quizplus · Accepted Answer

The opportunity cost of 1 birdhouse in Manitoba is 4/3 baskets (as seen in the first row of the table). Therefore, Manitoba should produce baskets since it has a comparative advantage in producing baskets (lower opportunity cost of 3/4 birdhouses per basket compared to Ontario's opportunity cost of 1 birdhouse per basket). Therefore, Manitoba should specialize in producing baskets and trade with Ontario to maximize overall output.

Table 3-4 -Refer to Table 3-4. What Is the Opportunity Cost of the Opportunity