Asked by Laura Cinnamon on Apr 29, 2024
Verified
Refer to Table 20.5. In Vietnam, the opportunity cost of
A) a lb. of tea is 2/15 of a bushel of cashews.
B) a lb. of tea is 1/8 of a bushel of cashews.
C) a lb. of tea is 40 bushels of cashews.
D) a bushel of cashews is 4/3 of a lb. of tea.
Opportunity Cost
Refers to the benefits one foregoes by choosing one option over another, highlighting the trade-offs inherent in decision-making processes.
Bushel
A unit of volume that is used in the United States for measures of agricultural produce, such as grains, fruits, and vegetables.
- Comprehend the link between opportunity cost and decisions related to trade.
Verified Answer
HA
Hamzah AlmalhiMay 03, 2024
Final Answer :
A
Explanation :
The opportunity cost of a lb. of tea in Vietnam can be calculated by looking at the change in cashews production as tea production decreases. From the table, producing 600 lbs. of tea requires giving up 0 bushels of cashews, and producing 450 lbs. of tea (a decrease of 150 lbs.) requires giving up 20 bushels of cashews. Therefore, the opportunity cost of 1 lb. of tea is 20 bushels of cashews / 150 lbs. of tea = 2/15 of a bushel of cashews.
Learning Objectives
- Comprehend the link between opportunity cost and decisions related to trade.
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