For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is lower in Denmark.
b. The opportunity cost of producing cheese is lower in Denmark.
c. The opportunity cost of producing watches is identical in both countries.
d. It is impossible to compare opportunity costs because the two countries use different currencies.
e. In Germany the opportunity cost of producing one pound of cheese is one watch.
A
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Zari takes a summer course in London, England. She doesn't buy British pounds at the U.S. airport, where the rate is 1 pound = $1.60 . Upon arrival in London, she finds that she can buy pounds for $1.65 each. Which of the following is true?
a. Zari would have been better off if she had bought pounds in the United States where U.S. dollars were cheaper. b. Zari would have been better off if she had bought pounds in the United States where pounds were less expensive. c. The pounds were more expensive in London because a currency is always most valued in its home country. d. The pounds were more expensive in the United States because they are less available there. e. It doesn't matter where she buys the pounds, since she can't use U.S. money anyway once she's in England.