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JAMB Economics 1984 Question 39

Question 39

International Trade

Questions 39 and 40 are based on the table below:
The international production set for Nigeria and Austria is:
Products | Nigeria | Austria
Cocoa | 20 tonnes | 12 tonnes
Lace | 10 metres | 8 metres
The opportunity cost ratio for cocoa and lace for Austria and Nigeria is

  1. A.2,2
  2. B.2,1.5
  3. C.1.5,4
  4. D.1.5,2
  5. E.0.5,1.5.
Show the answer and explanation

Answer: D (1.5,2)

Explanation

Comparing the two products: Austria gives up 12 tonnes of cocoa for 8 metres of lace, a ratio of 12/8 = 1.5; Nigeria 20/10 = 2. So Austria 1.5, Nigeria 2.