What is the opportunity cost of producing 1 unit of machinery in Brazil?

Question

ScanSolve AI Tutor · Accepted Answer

The opportunity cost of producing a good is the value of the next best alternative that must be given up to produce that good. In this case, it's about how much wine Brazil must give up to produce one unit of machinery.

Identify the labor hours required for each good in Brazil.
From the table for Brazil:
- To produce 1 unit of Wine: 15 hours
- To produce 1 unit of Machinery: 30 hours
Calculate the opportunity cost of producing 1 unit of machinery in terms of wine.
To find the opportunity cost of 1 unit of machinery, we determine how many units of wine could be produced with the same amount of labor hours required for 1 unit of machinery.

Opportunity Cost of 1 unit of Machinery = $\frac{\text{Labor hours for 1 unit of Machinery}}{\text{Labor hours for 1 unit of Wine}}$
Substitute the values for Brazil into the formula.
$\text{Opportunity Cost of 1 unit of Machinery} = \frac{30 \text{ hours}}{15 \text{ hours/unit of wine}}$ $\text{Opportunity Cost of 1 unit of Machinery} = 2 \text{ units of wine}$
Compare the result with the given options.
The calculated opportunity cost is 2 units of wine, which matches option a.

The final answer is $\boxed{\text{a. 2 units of wine}}$ .
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What is the opportunity cost of producing 1 unit of machinery in Brazil?

Answer

Step-by-step solution

Identify the labor hours required for each good in Brazil.

Calculate the opportunity cost of producing 1 unit of machinery in terms of wine.

Substitute the values for Brazil into the formula.

Compare the result with the given options.

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