Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Suppose Japan decides to increase its production of cars by 45.What is the opportunity cost of this decision?
A) 9 airplanes
B) 15 airplanes
C) 135 airplanes
D) 225 airplanes

Question

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.Suppose Japan decides to increase its production of cars by 45.What is the opportunity cost of this decision?
A) 9 airplanes 
B) 15 airplanes 
C) 135 airplanes 
D) 225 airplanes

Quizplus · Accepted Answer

The opportunity cost is calculated by determining how many airplanes Japan must give up to produce 45 more cars. If the production possibility frontier shows that 5 cars cost 1 airplane, then 45 cars would cost 9 airplanes.

Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars