Question 6 1 pts Figure 3-9 Uzbekistan\'s Production Possibilities Frontier Azer

Question

Question 6 1 pts Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier 100 naits 100 90 80 70 90 70 50 40 30 40 30 10 10 5 10 15 20 25 30 35 40 45 S0 o 5 10 15 20 25 30 35 40 45 50 *, Refer to Figure 3-9. Azerbaijan's opportunity cost of one bolt is 1/4 nail and Uzbekistan's opportunity cost of one bolt is 2 nails. 1/4 nail and Uzbekistan's opportunity cost of one bolt is 1/2 nail. 4 nails and Uzbekistan's opportunity cost of one bolt is 2 nails. 4 nails and Uzbekistan's opportunity cost of one bolt is 1/2 nail.

Explanation / Answer

Answer

The correct answer is (c) 4 nails and Uzbekistan's opportunity cost of one bolt is 2 nails.

We can see from above graph that in order to produce 20 bolts Azerbaijan has to sacrifice 80 nails. Hence in order to produce 1 bolt Azerbaijan has to sacrifice 80/20 = 4 nails. Hence Azerbaijan's Opportunity Cost of one bolt is 4 nails.

Similarly as above, We can see from above graph that in order to produce 30 bolts Uzbekistan has to sacrifice 60 nails. Hence in order to produce 1 bolt Uzbekistan has to sacrifice 60/30 = 2 nails. Hence Uzbekistan's, Opportunity Cost of one bolt is 2 nails.

Hence, The correct answer is (c) 4 nails and Uzbekistan's opportunity cost of one bolt is 2 nails.

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