To find the opportunity cost of producing one pen in terms of erasers, we will compare the total number of erasers that can be produced to the total number of pens.
If Country D can produce 25 erasers or 100 pens, then we want to understand the cost of one pen in the amount of erasers that could have been produced instead.
First, we establish the ratio of erasers to pens. This can be written as:
25 erasers / 100 pens
If we divide both numbers by 100, we are essentially asking how many erasers could be produced in place of 1 pen.
25 / 100 = 0.25 erasers per pen
This means that for every pen Country D chooses to produce, they are giving up the opportunity to produce 0.25 of an eraser. Therefore, the opportunity cost of producing one pen is 1/4 of an eraser.
The correct answer is:
O d. 1/4 of an eraser
