Computing opportunity cost of producing textiles rather food
Country C is able to generate seven pounds of food or four yards of textiles per unit of input. Calculate the opportunity cost of producing food rather than textiles. Also, compute the opportunity cost of producing textiles rather than food.
Expert
The opportunity cost of producing food rather than textiles is one yard of textiles per 7/4 = 1.75 pounds of food. The pound of food has an opportunity cost of 4/7 = .57 yards of textiles.
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