Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.The opportunity cost of one tomato is:
A)lower in Country A than Country B.
B)higher in Country A than Country B.
C)the same in both countries.
D)impossible to calculate without more information.

Question

Quizplus · Accepted Answer

The opportunity cost of one tomato is the number of bananas that a country must give up to produce one more tomato. In Country A, one worker can produce either 25/5 = 5 tomatoes or 5/25 = 0.2 bananas each year. Therefore, the opportunity cost of one tomato is 0.2 bananas. In Country B, one worker can produce either 18/6 = 3 tomatoes or 6/18 = 1/3 bananas each year. Therefore, the opportunity cost of one tomato is 1/3 bananas. Since the opportunity cost of one tomato is higher in Country A than Country B, the answer is B.

Suppose That a Worker in Country a Can Make Either