To determine which country should specialize in which good, we need to calculate the opportunity cost for each country in producing each good.
Step 1: Calculate the opportunity cost for the United States
The United States can produce either 60 thousand units of com or 10 thousand units of diamonds.
- Opportunity cost of producing 1 thousand units of com for the United States:
[tex]\[ \text{US Opportunity Cost for Com} = \frac{10 \text{ diamonds}}{60 \text{ com}} = \frac{1}{6} \text{ diamonds} \][/tex]
- Opportunity cost of producing 1 thousand units of diamonds for the United States:
[tex]\[ \text{US Opportunity Cost for Diamonds} = \frac{60 \text{ com}}{10 \text{ diamonds}} = 6 \text{ com} \][/tex]
Step 2: Calculate the opportunity cost for Congo
Congo can produce either 20 thousand units of com or 5 thousand units of diamonds.
- Opportunity cost of producing 1 thousand units of com for Congo:
[tex]\[ \text{Congo Opportunity Cost for Com} = \frac{5 \text{ diamonds}}{20 \text{ com}} = \frac{1}{4} \text{ diamonds} \][/tex]
- Opportunity cost of producing 1 thousand units of diamonds for Congo:
[tex]\[ \text{Congo Opportunity Cost for Diamonds} = \frac{20 \text{ com}}{5 \text{ diamonds}} = 4 \text{ com} \][/tex]
Step 3: Determine specialization based on opportunity costs
To identify which country should specialize in which good, we compare the opportunity costs of each good for both countries:
- For com:
- United States: [tex]\( \frac{1}{6} \text{ diamonds} \)[/tex]
- Congo: [tex]\( \frac{1}{4} \text{ diamonds} \)[/tex]
Since [tex]\( \frac{1}{6} \text{ diamonds} < \frac{1}{4} \text{ diamonds} \)[/tex], the United States has a lower opportunity cost for producing com than Congo.
- For diamonds:
- United States: 6 com
- Congo: 4 com
Since [tex]\( 4 \text{ com} < 6 \text{ com} \)[/tex], Congo has a lower opportunity cost for producing diamonds than the United States.
Based on these opportunity costs, the United States should specialize in producing com, and Congo should specialize in producing diamonds.
Therefore, the correct statement based on the data table is:
The United States should specialize in com and trade for diamonds.
