Question

What is the opportunity cost of a car in Japan? What is the opportunity cost of an airplane in Japan? 

Answer 1

Solution:

The opportunity cost is the benefit that would have been obtained if a different option had been chosen.

The opportunity cost of a car in Japan is $\frac{1}{3}$ airplane

= $\frac{16}{48}$ = $\frac{1}{3}$ airplane

 

The opportunity cost of an airplane in Japan is 3 cars

= $\frac{48}{16}$ = 3 cars