Question

A country can use all its resources to produce Product A and Product B. If you know the opportunity cost of producing Product A in terms of Product B, how can you quickly determine the cost of Product B in terms of product A? Explain in one to two sentences, using an example. a is wood and b is paper

Answer 1

The cost is the reciprocal: the opportunity cost of 1 unit of B in terms of A = 1 ÷ (opportunity cost of 1 unit of A in terms of B). For example, if making 1 unit of wood (A) costs 4 units of paper (B), then making 1 unit of paper costs 1/4 unit of wood.