For Each Watch Denmark Produces, It Gives Up the Opportunity

question 166

Multiple Choice

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?

• A) The opportunity cost of producing watches is lower in Denmark.
• B) The opportunity cost of producing cheese is lower in Denmark.
• C) The opportunity cost of producing watches is identical in both countries.
• D) It is impossible to compare opportunity costs because the two countries use different currencies.
• E) In Germany the opportunity cost of producing one pound of cheese is one watch.

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