Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.

-Refer to Table 3-3.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?
A) 0.3 hairbrush
B) 3 hairbrushes
C) 30 hairbrushes
D) 100 hairbrushes

Question

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-3.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?
A) 0.3 hairbrush 
B) 3 hairbrushes 
C) 30 hairbrushes 
D) 100 hairbrushes

Quizplus · Accepted Answer

The opportunity cost is the amount of hairbrushes that Zimbabwe has to give up to produce 10 more toothbrushes. If the production possibility table indicates that for every toothbrush produced, 0.3 hairbrush is forgone, then for 10 toothbrushes, 3 hairbrushes (10 x 0.3) are the opportunity cost.

Table 3-3 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes