Use the following to answer questions:
-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in Canada as (than)in Mexico.

Question

Use the following to answer questions: 
-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in Canada as (than)in Mexico.

Quizplus · Accepted Answer

According to the table, Canada can produce 80 units of petroleum or 40 units of machinery with all of its resources, while Mexico can produce 40 units of petroleum or 20 units of machinery with all of its resources. Therefore, the opportunity cost of producing 1 unit of petroleum in Canada is 1/2 unit of machinery (80/40 = 2), while the opportunity cost of producing 1 unit of petroleum in Mexico is 1/2 unit of machinery (40/20 = 2) as well. However, since Canada can produce more petroleum than Mexico with the same amount of resources, the opportunity cost of petroleum production is lower (or less) in Canada than in Mexico. Therefore, the answer is B, petroleum; more.

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