Question

The table below presents the choices faced by a feudal lord in ancient China.

Feudal China's Production Possibilities
Terracotta Statues Porcelain Vases
7 35
6 45
5 55
4 65
3 75

What is the opportunity cost of producing the 5th terracotta statue?
1. 5 porcelain vases
2. 20 porcelain vases
3. 10 porcelain vases
4. 30 porcelain vases

Answer 1

The opportunity cost of producing the 5th terracotta statue is 1 porcelain vase, which is the difference in the number of vases that could have been produced if the lord had chosen to produce only 4 statues instead.

Step-by-step explanation:

The opportunity cost of producing the 5th terracotta statue is the number of porcelain vases that could have been produced instead. By looking at the production possibilities table, we can see that the option to produce 4 terracotta statues comes with the ability to produce 6 porcelain vases, whereas the option to produce 5 terracotta statues comes with the ability to produce only 5 porcelain vases. Therefore, the opportunity cost of the 5th terracotta statue is the difference in the number of porcelain vases that could have been produced instead, which is 1 porcelain vase.