Question

If Korea is capable of producing either shoes for soccer balls or some combination of the two then a. Korea should specialize in the product in which it has an absolute advantage. b.It would be impossible for Korea to have an absolute advantage over another country in both products. c.Korea is efficient in the production of both goods. d.Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Answer 1

Question:

If Korea is capable of producing either shoes or soccer balls or some combination of the two then a. Korea should specialize in the product in which it has an absolute advantage.

b. It would be impossible for Korea to have an absolute advantage over another country in both products.

c. Korea is efficient in the production of both goods.

d. Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Answer:

d. Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Explanation:

Opportunity cost is defined as the cost of choosing or picking particular option or alternative over another option or alternative.

In question, we are told that Korea is capable of producing either shoes or soccer balls or some combination of the two.

Therefore Korea would have to make a list of priorities also know as alternatives or options, to decide if

a. they would produce shoes,

b. or soccer balls

c. or a combination of both shoes or soccer balls.

This process described here is the process of Opportunity cost. Korea would then weigh their options and choose which is better for them either based on profit or any other reason.

Hence, Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.