Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true? The opportunity cost of:

Question

Quizplus · Accepted Answer

To determine the opportunity cost of one product, we need to calculate how much of the other product must be given up. In Country A, the opportunity cost of 1 iPod is 2 tablets (10 iPods/5 tablets = 2 iPods/tablet). Therefore, the answer is not A. In Country B, the opportunity cost of 1 iPod is 5 tablets (10 tablets/2 iPods = 5 tablets/iPod). Therefore, the answer is not D. 
The statement 'Tablets is lower in Country A than Country B' is incorrect because the opportunity cost of tablets is higher in Country A (2 iPods/tablet) compared to Country B (0.2 iPods/tablet). Therefore, the correct answer is B.

Suppose That a Worker in Country a Can Make Either