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-(Table: Coffee and Salmon Production Possibilities)Use Table: Coffee and Salmon Production Possibilities.The table shows the maximum amounts of coffee and salmon that Brazil and Alaska can produce if they just produce one good.The opportunity cost of producing 1 unit of salmon for Alaska is _____ coffee(s).
A)2
B)0.25
C)1
D)0.5

Question

Use the following to answer question:

-(Table: Coffee and Salmon Production Possibilities)Use Table: Coffee and Salmon Production Possibilities.The table shows the maximum amounts of coffee and salmon that Brazil and Alaska can produce if they just produce one good.The opportunity cost of producing 1 unit of salmon for Alaska is _____ coffee(s).
A)2 
B)0.25 
C)1 
D)0.5

Quizplus · Accepted Answer

The opportunity cost for producing 1 unit of salmon in Alaska is 2 coffees. However, the question asks for the opportunity cost of producing 1 unit of salmon, which means we need to find the ratio of the two goods. The ratio for Alaska is 4:8, which simplifies to 1:2. Therefore, the opportunity cost of producing 1 unit of salmon for Alaska is 1 coffee. Brazil's opportunity cost for producing 1 unit of salmon is 0.5 coffee. Since Alaska has a lower opportunity cost for salmon production, it has a comparative advantage in salmon production. Therefore, Alaska should specialize in salmon production and trade with Brazil for coffee.

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