Suppose a small economy can produce the following combinations of goods A and B.
Good A Good B
20 0
15 10
10 20
5 30
0 40
1. The opportunity cost of a unit of good B is units of good A, while the opportunity cost of good A is units of good B.

The correct answers are "0,5" and "2".

Explanation: The opportunity cost of a unit of good B is "0,5" units of good A, while the opportunity cost of good A is "2" units of good B.

The opportunity cost is calculated by the division of what I sacrifice over what I produce, in this case the first line of good A and the last line of good B. therefore :

Opportunity cost to produce a unit of the good B = 20/40 = 0.5.

Opportunity cost to produce a unit of good A = 40/20 = 2.

The answers are 0.5 units of good B and 2 units of good A.

Explanation: Opportunity cost is the situation whereby an opportuinty of cost is foregone for another. This arises where there are options in production.

In determining the opportunity cost of both good A and good B, we check for the production that completely neglects the other. In this case, 20 of goods A can be produced when no goods B is produced while 40 goods B can be produced while goods A is completely neglected.

Therefore opportunity cost of goods B is 20/40 = 0.5 units of goods A.

While the opportunity cost of goods A is 40/20 = 2 units of goods B.

the answer is: guns or butter

hope i

-lavira : )