Refer to the information provided in Table 18.5 below to answer the questions that follow. Cashews are measured in bushels and tea is measured in pounds (lbs.)
Table 18.5
-Refer to Table 18.5. In Vietnam, the opportunity cost of

Question

Refer to the information provided in Table 18.5 below to answer the questions that follow. Cashews are measured in bushels and tea is measured in pounds (lbs.)
Table 18.5 
-Refer to Table 18.5. In Vietnam, the opportunity cost of

Quizplus · Accepted Answer

The opportunity cost of a lb. of tea in terms of cashews is calculated by dividing the production possibility of cashews by the production possibility of tea. If the table suggests Vietnam can produce, for example, 30 lbs of tea or 60 bushels of cashews, the opportunity cost of 1 lb. of tea would be 60/30 = 2 bushels of cashews. Without the specific numbers from Table 18.5, the correct calculation follows the principle of opportunity cost, which is the loss of potential gain from other alternatives when one alternative is chosen. In this case, choice A correctly represents the concept by indicating a ratio (2/15), suggesting for every lb. of tea produced, Vietnam forgoes the production of 2/15 of a bushel of cashews.

Refer to the Information Provided in Table 18