At most, a country could produce 20,000 units of Good A or 5,000 units of Good B. What is the opportunity cost of producing one unit of Good B in terms Good A?(1 point)

Question

Responses

14 unit of Good B
1 fourth unit of Good B

4 units of Good B
4 units of Good B

4 units of Good A
4 units of Good A

14 unit of Good A

Answer 1

To find the opportunity cost of producing one unit of Good B in terms of Good A, we first need to understand the production possibilities.

The maximum production is:

• 20,000 units of Good A
• 5,000 units of Good B

To determine the opportunity cost, we can calculate how many units of Good A must be given up to produce one unit of Good B.

1. At maximum production, if the country produces 5,000 units of Good B, the amount of Good A it could produce is:

   \[ 20,000 \text{ units of Good A} \quad \text{(if producing only Good A)} \]

2. If the country produces 5,000 units of Good B, it uses up resources that could have produced Good A. The opportunity cost of producing Good B can be calculated by finding out how many units of Good A are foregone for each unit of Good B produced:

   For 5,000 units of Good B, the foregone Good A is:

   \[ 20,000 \text{ Good A} \div 5,000 \text{ Good B} = 4 \text{ Good A for each Good B} \]

Thus, the opportunity cost of producing one unit of Good B is 4 units of Good A.

The correct response is: 4 units of Good A.