Question

Jordan and Cambodia produce tile and fertilizer. If all resources were invested in only one commodity, Jordan could produce 1.5 million tiles each month or 7 million tons of fertilizer. Cambodia could produce 2 million tiles or 3 million tons of fertilizer. What is the opportunity cost of producing one more tile in Jordan?

Answer 1

Answer

the opportunity cost of producing one more unit=Maximum production of other good /maximum production of the good

the opportunity cost of producing one more tile in Jordan =7/1.5

=4.66666667 fertilizer

=4.67 fertilizer

the opportunity cost of producing one more tile in Jordan is 4.67 fertilizer

Answer 2

The opportunity cost of producing one more tile in Jordan is the number of tons of fertilizer that Jordan has to give up to produce that additional tile.

To find the opportunity cost, we compare the tile production capability of Jordan with the fertilizer production capability of Jordan:

• Jordan can produce 1.5 million tiles per month or 7 million tons of fertilizer.

• Cambodia can produce 2 million tiles or 3 million tons of fertilizer.

To produce one more tile, Jordan has to give up the production of 1/1.5 million (approximately 0.00067) tons of fertilizer.

So, the opportunity cost of producing one more tile in Jordan is approximately 0.00067 tons of fertilizer

Answer 3

The opportunity cost of producing one more tile in Jordan is the quantity of fertilizer that Jordan must forgo to produce that additional tile. To find this, we need to compare the production possibilities of tiles and fertilizer in Jordan.

Let's assume that Jordan decides to produce only tiles. In this case, Jordan can produce 1.5 million tiles per month. Now, if Jordan decided to produce fertilizer instead, it could produce 7 million tons of fertilizer.

So, the opportunity cost of producing one more tile in Jordan is the quantity of fertilizer that Jordan could have produced instead. Therefore, the opportunity cost is 7 million tons of fertilizer.