Suppose the Unlted States and Switzerland produce computers and fine watches. Su

Question

Suppose the Unlted States and Switzerland produce computers and fine watches. Suppose the production of computers and watches In the United States and Switzerland is as follows: TABLE 1 Computers( Watches(millions/year) Switzerland 2 U.S. 8. 10 Based on Table 1, the opportunity cost of producing 8 computers in the United States is: O 2 computers O an unknown amount of money D10 watches O 2 watches QUESTION 2 Based on Table 1 above, the opportunity cost of producing 8 computers in the Switzerla O 16 watches O 4 watches O 16 computers 0 none of the above nd is: Save All

Explanation / Answer

1.

Correct Answer:

10 Watches

Working note:

As per the tabular data,

In the USA, the opportunity cost of 8 computers = 10 watches (already evident from the table)

2.

Correct Answer:

16 watches

Working Note:

As per the tabular data,

In the Switzerland, the opportunity cost of 2 computers = 4 watches

Then,

The opportunity cost of 8 computers = 16 watches

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