-(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming Constant Costs

question 176

Multiple Choice

-(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated. Based on the information in the exhibit, it is true that:

• A) The opportunity cost of machinery is more in the United States than in Mexico.
• B) Machinery costs are the same in the United States and in Mexico.
• C) The opportunity cost of machinery is less in the United States than in Mexico.
• D) The opportunity cost of petroleum is less in the United States than in Mexico.

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