Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.

-Refer to Table 3-5.The opportunity cost of 1 unit of bread for Spain is
A) 1/2 unit of cheese.
B) 1/2 hour of labor.
C) 2 units of cheese.
D) 8 hours of labor.

Question

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.The opportunity cost of 1 unit of bread for Spain is
A) 1/2 unit of cheese. 
B) 1/2 hour of labor. 
C) 2 units of cheese. 
D) 8 hours of labor.

Quizplus · Accepted Answer

The opportunity cost of producing one good is the amount of another good that must be given up. If Spain gives up 2 units of cheese to produce 1 unit of bread, then the opportunity cost of 1 unit of bread is 2 units of cheese.

Table 3-5 Assume That England and Spain Can Switch Between Producing Cheese