For a country producing 2 goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

Question

Quizplus · Accepted Answer

This statement is known as the principle of comparative advantage, which states that countries should specialize in producing the goods with a lower opportunity cost and trade with other countries to obtain the goods with a higher opportunity cost. The opportunity cost of producing one good is the amount of the other good that must be given up, so the opportunity cost of one good is the inverse of the opportunity cost of the other good.

For a Country Producing 2 Goods, the Opportunity Cost of One