Suppose that, on the basis of a nations production possibilities curve, an economy must sacrifice 10,000 pizzas

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Suppose that, on the basis of a nation’s production possibilities curve, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional industrial robot it desires but that it can get the robot from another country in exchange for 9000 pizzas. Relate this information to the following statement: “Through international specialization and trade, a nation can reduce its opportunity cost of obtaining goods and thus ‘move outside its production possibilities curve.

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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Economics

ISBN: 978-0073375694

18th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

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