Opportunity cost

[nomorepie]

I have a basic assignment including some tasks concerning opportunity costs. My textbook has taught me that "The opportunity cost of producing something measures the cost of not being able to produce something else with the resources used". I do however know nothing about reading arrows, Y and X like in task 1 in the picture. If there was a table listing the cost of producing say, computers in China and Bikes in Korea, I would be able to tell the opportunity cost of both, but I have no idea how to work with the arrows, X and Ys in this task. Could someone help me on my way?

What I do know is that

* = USA
Y = Good 1
X = Good 2

The rest I simply have no clue about.

 

[mmm4444bot]

know nothing about reading arrows, Y and X like in task 1

What I do know is that

* = USA
Y = Good 1
X = Good 2

The meaning of symbol > is "greater than".

The _x and _y are called subscripts. These subscripts are a symbolic way to distinguish between labor units for goods 1 and 2, just like the asterisk distinguishes which symbols represent US versus Korean production.

We read the inequality a_x* > a_y* like this: a_x* is greater than a_y*.

So, the meaning tells us that more labor units are required in the US to produce Good 2 than are required to produce Good 1.

Likewise, the inequality a_y* > a_y tells us that producing Good 1 in the US requires more labor units than producing the same good in Korea, and so on.

You may interpret the statement a_x* > a_y* > a_y > a_x as a list which ranks (from left to right) the values in decreasing order.

Cheers ~ Mark :cool:

 

[nomorepie]

Thanks a lot!

So, I understand the relative cost now (more expensive to produce in the US, cheaper in Korea).

But how would I be able to tell the exact opportunity cost? The task does not explain exactly how much it costs to produce any of the goods.

Answering the "What is the opportunity cost of producing one unit of good X in the US?" question, would I just say that the opportunity cost is "the amount of good Y not produced"?

Or do I have to assign values relative (1000/800/600/400) to each entry?

I guess what I'm asking is if I should make up numbers or just stick to talking about everything in Ys Xs etc?

 

[nomorepie]

The task DOES explain exactly how much it costs to produce each product. The letters represent numbers.

I am very confused. If you are trying to study economics without any training in algebra and differential calculus, you are in for great disappointment.

I know that the letters represent numbers. What I'm wondering about is if I should actually switch them out with numbers when giving my answer, or answer using the letters.

I would not ask if I had already studied this. Sorry

 

[nomorepie]

As for your immediate question, you are to answer using the letters that represent numbers.

Thank you kindly! I'm not a student of economics, I just have a one-off task and I am happy you helped me out!