Table 2-8
Table 2-8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-8.What is Scotland's opportunity cost of producing one motorcycle?

Question

Table 2-8
  Table 2-8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-8.What is Scotland's opportunity cost of producing one motorcycle?

Quizplus · Accepted Answer

According to Table 2-8, Scotland requires 48 labour hours to produce one motorcycle and 192 labour hours to produce one guitar. Therefore, Scotland's opportunity cost of producing one motorcycle is 192/48 = 4 guitars. The best choice would be to specialize in producing guitars and trade with Ireland for motorcycles since Ireland's opportunity cost of producing one motorcycle is lower (2 guitars).

Table 2-8 Table 2-8 Shows the Number of Labour Hours