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prpnum1 prpnum1
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2 weeks ago
An economy produces two items: helicopters and wine.
PointHelicopterWine
A10​0
B8​14​
C4​28​
D035​
Moving from point B to point A, the opportunity cost of producing one helicopter is ________ wine and the opportunity cost of producing one bottle of wine is ________ helicopter. Round your final answer to two decimal places.
This economy faces ________ opportunity cost.

▸ 0.14, 7, increasing

▸ 7, 0.14, constant

▸ 7, 0.14, increasing

▸ 0.14, 7, constant
Textbook 

Macroeconomics


Edition: 3rd
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jewelzzPjewelzzP
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7, 0.14, increasing

Moving from point B to point A, the opportunity cost of producing one helicopter is the number of wines you have to give up.
In this example, 10 - 8 helicopters can be produced at a cost of 14 bottles of wine, or 2 helicopters = 14 wine
1 helicopter = 14/2 wine = 7 wine

The opportunity cost of producing one wine is the number of helicopters you have to give up.
In this example, 14 bottles of wine can be produced at 10 - 8 helicopters, or 14 wine = 2 helicopters
1 wine = 2/14 helicopters = 0.14 helicopters

Moving from point C to D, you can produce 35 - 28 bottles of wine at a cost of 4 helicopters, or 7 wine = 4 helicopters
1 wine = 4/7 helicopters = 0.57 helicopters

Because the price of wine increases (from 0.14 helicopters to 0.57 helicopters) as you produce more and more wine, the opportunity cost is increasing.
This verified answer contains over 140 words.
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prpnum1 Author
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2 weeks ago
Correct Slight Smile TY
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Smart ... Thanks!
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I appreciate what you did here, answered it right Smiling Face with Open Mouth
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