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# Opportunity Cost and Comparative Advantage

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Relative production costs:

Per pound of titanium per bushel of wheat
US \$10 \$1

Russia 5,000 rubles 2,500 rubles

The opportunity cost of an additional pound of titanium is: ???? in the US and ?????? in Russia

The opportunity cost of an additional bushel of wheat is ???? in the US and ?????? in Russia

I feel like the \$ are making this difficult for me to do, because I thought I understood opportunity cost her but I am struggling with this one. I don't know if it is -9.00 or 0.10 cents.
I assume the US has the comparative advantage in wheat because the can make it for \$1 instead of a pound of titanium for \$10, but I'm not sure. I think Russia has the comparative advantage in titanium because the give up less wheat to make titanium, but I'm not totally sure. Please help me.

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#### Solution Preview

What is opportunity cost? Opportunity cost is what you must give up of one good to gain more of another. In this case, opportunity cost of titanium will be based on how much wheat must be given up to get more titanium. The opportunity cost of wheat will be based on how much titanium must be given up to gain more wheat.

The first thing I looked at was how to get the monetary units out of the table. By looking at it in terms of units of goods, you can rewrite the table to look like this:
...

#### Solution Summary

The solution to a comparative advantage/opportunity cost problem using monetary units as the constant to create the table.

\$2.19