Hey Guys,
Here is an oppotunity cost problem I always dont know how to solve it correctly. What do you do when encountering this type of questions.
The country of Hokah uses 30 units of labor to produce a unit of cheese and 35 units of labor to produce a unit of leather. The country of Ymer uses 25 units of labor to produce a unit of cheese and 20 units of labor to produce a unit of leather. Which of the following statements is most accurate?
A. Ymer’s oppotunity cost of unit of leather is 0.8 units of cheese.
B. Hokah’s oppotunity cost of one unit of cheese is 1.167 units of leather.
C. Ymer has an absolute and a comparative advantage in both cheese and leather.
Thank you guys!