Computers (per year) 200 150.... 100+ 50 25 50 75 100 125 VCRs (per year) 11) Th

Question

Computers (per year) 200 150.... 100+ 50 25 50 75 100 125 VCRs (per year) 11) The figure above illustrates a small country's production possibilities frontier. Moving from point A to point B, the per unit opportunity cost of VCR is per VCR. A) 100 computers B) 2 computers C) 4/3 of a computer D) 1/2 of a computer E) 1 VCR Suppose the United States has 100 million hours of labor available to produce music CDs and textiles, and India has 300 million hours available. In the United States, it takes 2 hours of 2

Explanation / Answer

Moving from point A to B we are giving up 50 computers and producing 25 VCR more. So, the opportunity cost of the VCR is 2 computers Per VCR i.e. we have to give up 2 computers to produce 1 VCR.

The answer is "B".

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