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Q. 4

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Economics Today
Found in: Page 729

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Short Answer

Residents of the nation of Border Kingdom can forgo production of digital televisions and utilize all available resources to produce 300 bottles of high-quality wine per hour. Alternatively, they can forgo producing wine and instead produce 60 digital TVs per hour. In the neighboring country of Coastal Realm, residents can forgo production of digital TVs and use all resources to produce 150 bottles of high-quality wine per hour, or they can forgo wine production and produce 50 digital TVs per hour. In both nations, the opportunity costs of producing the two goods are constant.

a. What is the opportunity cost of producing digital TVs in Border Kingdom? Of producing bottles of wine in Border Kingdom?

b. What is the opportunity cost of producing digital TVs in Coastal Realm? Of producing bottles of wine in Coastal Realm?

a. The opportunity cost of producing digital TVs in Border Kingdom is 5 of producing bottles of wine in Border Kingdom is 0.2.

b. The opportunity cost of producing digital TVs in Coastal Realm is 5of producing bottles of wine in Coastal Realm is 0.33.

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Step by Step Solution

Step 1: Introduction

The Frontier Empires have just a west border where its Dazzling Water meets their. Several coastlines range out from edge of the River Scelptar with in southward here to inlet of the Port of Spit as in north, beyond Theymarsh. It Whirlwind Rivers flow and along eastern border both of Fencing Kings. and this artificial barrier goes eastern for about 700 yards to Alamontyr, their eastern side metropolis.

Step 2: Given Information (a)

In the other phrases, that's the actual cost of both the top pick and indeed the value of both the foremost solution.

The following table highlights total supply of Glass Containers of Tellies in the Frontier Empire the Coastline Region, to between:

Step 3: Explanation (a)

a) Within Frontier County, the future cost of screens is calculated by the following equation:

You could see from the table well above the:

Border Kindom Production of Wine Bottles =300

Border Kindom Production of TVs=60

That possibility cost is determined by changing the quantities as in calculation following table:

Opportunity Cost = Border Kingdom Production of Wine Bottles Border Kingdom Production of TVs

=30060

localid="1652547861872" =5

As either a corollary, total opportunity of television in Frontier County equals 5 wine fixed crates.

Step 4: Bottles in Border

Determine the Pinot Bottles' actual cost in Frontier County already:

Oppertunity Cost = Border Kingdom Production of TVs Border Kingdom Production of Wine Bottles

=60300

=0.2

As either a corollary, total opportunity of Wine containers in Frontier County equals 0.2 television for set.

Step 5: Explanation (b)

b) Under Shoreline Realm, the future cost owning TVs are calculated by the following equation:

As could see in the column above those:

Coastal Realm Production of Wine Bottles =150

Coastal Realm Production of TVs =50

The possibility price is estimated by entering these variables there in calculation elsewhere here:

Opportunity Cost = Coastal Realm Production of Wine Bottles Coastal Realm Production of TVs

=15050

=3

As both a corollary, total economic cost of either a show in Maritime Horizon is 3 champagne liters per screen.

Step 6: Average expense for sets 

Potential expected cost of rent in Riviera Monarchy Glass Containers be determined using the formula:

Opportunity Cost = Coastal Realm Production of TVs Coastal Realm Production of Wine Bottles

=50150

=0.33

As either a conclusion, its glass bottle marginal utility in Seaside Kingdom is 0.33 T.V's every glass bottle.

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