Use the following to answer question(s): Production Possibilities for Machinery and Petroleum

-(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.Based on the information in the exhibit, it is true that:

Question

Use the following to answer question(s): Production Possibilities for Machinery and Petroleum
 
-(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.Based on the information in the exhibit, it is true that:

Quizplus · Accepted Answer

The exhibit shows that the opportunity cost of producing a certain amount of petroleum is lower in the United States than in Mexico. This means that, in the United States, they would have to give up fewer units of machinery to produce the same amount of petroleum as Mexico. Therefore, the opportunity cost of machinery is lower in the United States than in Mexico, making option C the correct answer. Option A is incorrect because the exhibit shows that the opportunity cost of machinery is less in the United States. Option B is incorrect because the exhibit clearly indicates different opportunity costs for the two countries. Option D is incorrect because the exhibit does not provide information on the opportunity cost of petroleum in either country.

Use the Following to Answer Question(s): Production Possibilities for Machinery