Question

question 15

Increasing opportunity costs suggest that:

		Resources are not perfectly shiftable between the production of two goods
		Resources are fully shiftable between the production of two goods
		A country's production possibilities curve appears as a straight line
		A country's production possibilities curve is bowed inward (i.e., convex) in appearance

question 16

Table 2.2. Output possibilities for South Korea and Japan

	Output per worker per day
Country	Tons of steel	VCRs
South Korea	80	40
Japan	20	20

Refer to Table 2.2. According to the principle of comparative advantage:

		South Korea should export steel
		South Korea should export steel and VCRs
		Japan should export steel
		Japan should export steel and VCRs

Answer 1

15) A Increasing opportunity cost means al resources are not same or inputs are not perfect substitutes

16) ans is A

Opportunity cost of 1VCR in South Korea =2tons of steel

Opportunity cost of 1 VCR in Japan=1 ton of steel

Thus Japan has comparative advantage in VCR and Southkorea in steel.