Figure 3-8

-Refer to Figure 3-8.Chile's opportunity cost of one pound of coffee is
A) 3/4 pound of soybeans and Colombia's opportunity cost of one pound of coffee is 1/2 pound of soybeans.
B) 3/4 pound of soybeans and Colombia's opportunity cost of one pound of coffee is 2 pounds of soybeans.
C) 4/3 pounds of soybeans and Colombia's opportunity cost of one pound of coffee is 1/2 pound of soybeans.
D) 4/3 pounds of soybeans and Colombia's opportunity cost of one pound of coffee is 2 pounds of soybeans.

Question

Figure 3-8
 
-Refer to Figure 3-8.Chile's opportunity cost of one pound of coffee is
A) 3/4 pound of soybeans and Colombia's opportunity cost of one pound of coffee is 1/2 pound of soybeans. 
B) 3/4 pound of soybeans and Colombia's opportunity cost of one pound of coffee is 2 pounds of soybeans. 
C) 4/3 pounds of soybeans and Colombia's opportunity cost of one pound of coffee is 1/2 pound of soybeans. 
D) 4/3 pounds of soybeans and Colombia's opportunity cost of one pound of coffee is 2 pounds of soybeans.

Quizplus · Accepted Answer

The opportunity cost of one pound of coffee is the amount of soybeans that could have been produced with the resources used to produce one pound of coffee. In Chile, the opportunity cost of one pound of coffee is 3/4 pound of soybeans (the slope of the coffee production possibility frontier). In Colombia, the opportunity cost of one pound of coffee is 1/2 pound of soybeans (the slope of the coffee production possibility frontier). Therefore, option A is correct.

Figure 3-8 -Refer to Figure 3-8.Chile's Opportunity Cost of One Pound of of One