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

4 units of Good A
4 units of Good A

14
unit of Good A
1 fourth unit of Good A

4 units of Good B
4 units of Good B

14
unit of Good B
1 fourth unit of Good B

Answer 1

To determine the opportunity cost of producing one unit of Good B in terms of Good A, we need to calculate how many units of Good A must be forgone to produce one unit of Good B.

According to the information given:

• Maximum production of Good A = 20,000 units
• Maximum production of Good B = 5,000 units

To find the opportunity cost, we can use the following steps:

1. Calculate the total opportunity cost for producing Good B: If the country could produce either 20,000 units of Good A or 5,000 units of Good B, it implies that for every unit of Good B produced, a certain amount of Good A is given up.

2. Determine how many Good A units are forgone to produce Good B:

   • If the country produces 5,000 units of Good B, it is forgoing 20,000 units of Good A.
   • Thus, for each unit of Good B produced, the amount of Good A forgone is:

   \[ \text{Opportunity cost of 1 unit of Good B} = \frac{20,000 \text{ units of Good A}}{5,000 \text{ units of Good B}} = 4 \text{ units of Good A} \]

So, 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.