The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4

-Refer to Table 2.4. If the countries were to engage in trade, what would be the least amount Ohio would accept for 1 cookie?

Question

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4
 
-Refer to Table 2.4. If the countries were to engage in trade, what would be the least amount Ohio would accept for 1 cookie?

Quizplus · Accepted Answer

The opportunity cost of producing a cookie in Ohio is 4 chilies. This means that Ohio would give up the production of 4 chilies to produce 1 cookie. In Iowa, the opportunity cost of producing a cookie is 2 chilies. This means that Iowa would give up the production of 2 chilies to produce 1 cookie. If Ohio were to trade with Iowa, it would be better for Ohio to produce chilies and trade with Iowa for cookies, since the opportunity cost of producing chili in Ohio is lower than in Iowa. Based on the table, the lowest amount Ohio would accept for 1 cookie is 4 chilies. Therefore, the answer is D.

The Table Given Below Represents the Output Per Hour of Cookies