Question

Alternate Outputs from One Day's Labor Input:

USA: 12 bushels of wheat or 3 yards of textiles.
India: 3 bushels of wheat or 12 yards of textiles.

The opportunity cost of one bushel of wheat in India is:

a. Syntax error from line 1 column 49 to line 1 column 73.
b. Unexpected ' c. 3 yards of textiles.
d. 4 yards of textiles.
e. 12 yards of textiles.

Answer 1

Answer:

d. 4 yards of textiles.

Explanation:

In India, the ratio of yards of textiles to bushels of wheat that can be manufactured in one day's labor is given by:

$r=\frac{12\ yards}{3\ bushels}\\r=\frac{4\ yards}{1\ bushels}$

This means that for each bushel of wheat, 4 yards of textiles could have been produced.

Therefore, the opportunity cost of one bushel of wheat in India is d. 4 yards of textiles.