- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 6. International Trade
- Subject 1. International Trade
CFA Practice Question
Units of output per work day:
B. 1 unit of food is 2 units of clothing.
C. 1 unit of clothing is 2 units of food.
Which of the following statements is correct?
In Japan, the opportunity cost of ______
A. 1 unit of food is 3 units of clothing.
B. 1 unit of food is 2 units of clothing.
C. 1 unit of clothing is 2 units of food.
Correct Answer: B
In Japan, it takes 1/3 of a work day to produce a unit of food. In the same length of time, it is possible for Japanese workers to produce 2 units of clothing. Consequently, the opportunity cost of 1 unit of food is 2 units of clothing.
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