Capital Goods 5 18 24 28 points 15 21 25 Ask an In grin Nom

Capital Goods 5 18 24 28 points 15 21 25 Ask an In grin Nom Canere na

Solution

15. The correct answer is : d)

Reason: By definition, opportunity cost of capital good is the number of consumer goods that needs to be sacrificed to get that amount of capital good. Here, in north Cantina, the opportunity cost of the 5 th unit of capital good is 10 units of consumer goods whereas in south Cantina, the opportunity cost of the 5th unit of capital good is 8 units of consumer goods. Thus, opportunity cost is higher in north Cantina than in south Cantina. Hence d).

P.S.: As per Chegg\'s policy, if nothing is mentioned then only the first question is to be answered.

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