The labour cost incurred in the production of 1 unit of Good A and B respectively in India are Rs 20…
The opportunity cost of one unit of B is its labour cost divided by that of A in the same country. It is \(40/20=2\) units of A in India and \(20/40=1/2\) unit of A in China.
Choose your answer
The labour cost incurred in the production of 1 unit of Good A and B respectively in India are Rs 20 and 40 whereas in the case of China it is Rs 40 and 20, then the opportunity cost of India and China in the production of Good B are__________ respectively.
Answer and explanation
Correct answer A
The opportunity cost of one unit of B is its labour cost divided by that of A in the same country. It is units of A in India and unit of A in China.
Practice for these exams
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Kerala SET (LBS Centre)