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Figure: Tom's Production Possibilities
-(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities. The opportunity cost for Tom to move from point A on the curve to point B is:
A)10 coconuts.
B)10 fish.
C)5 coconuts.
D)5 fish.

Question

Use the following to answer questions:
Figure: Tom's Production Possibilities 
-(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities. The opportunity cost for Tom to move from point A on the curve to point B is:
A)10 coconuts. 
B)10 fish. 
C)5 coconuts. 
D)5 fish.

Quizplus · Accepted Answer

Moving from point A to point B means Tom has to give up 5 coconuts in order to produce 10 more fish. Therefore, the opportunity cost of 1 fish is 0.5 coconuts (5 coconuts/10 fish), which is lower than the opportunity cost of 1 coconut at 2 fish (10 fish/5 coconuts). This means that Tom has a comparative advantage in producing fish and should choose to produce more fish instead of coconuts.

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