Figure 2-15 Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles.
-Refer to Figure 2-15. What is the opportunity cost of producing 1 snow cone in Greenland?

Question

Figure 2-15  Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles.
-Refer to Figure 2-15. What is the opportunity cost of producing 1 snow cone in Greenland?

Quizplus · Accepted Answer

The opportunity cost of producing 1 snow cone in Greenland is the slope of its production possibilities frontier. From the graph, we can see that the slope of Greenland's production possibilities frontier is -5/6. This means that to produce 1 more snow cone, Greenland must give up producing 5/6 of a popsicle. Therefore, the opportunity cost of producing 1 snow cone in Greenland is 5/6 of a popsicle.

The best choice(s) cannot be determined from the given information because we don't know the specific preferences or demands of each country. It depends on the relative prices and demand for snow cones and popsicles in each country.

Figure 2-15 Figure 2-15 Shows the Production Possibilities Frontiers