Answer to Question #268667 in Microeconomics for Bee

Question

Consider the following productivities in Table 1: TABLE 1: ZAMBIA- MALAWI TRADE PATTERNS

Services Manufacturing

Zambia 2 Units/hr. 6 Units/hr.

Malawi 6 Units/hr. 3 Units/hr.

Answer 1

The opportunity cost of services in Zambia is 3 manufacturing and in Malawi is 0.5 manufacturing.

(a) An opportunity cost can be explained as another best alternative that is sacrificed.

Zambia opportunity cost of 2 units/hr services is 6 units/hr manufacturing

1 service opportunity cost = 6/2

                                         = 3 manufacturing

Malawi opportunity cost of 6 units/hr services is 3 units/hr manufacturing 

1 service opportunity cost = 3/6

                                          =0.5 manufacturing