a) Suppose a country is able to produce a maximum of either 300 units of lumber or 100 units of rice. This country is currently allocating its labor resources to produce 75 units of lumber and 75 units of rice. To increase its lumber production by 6 units to 81, the country faces an opportunity cost of

2 units of rice

Explanation:

Opportunity cost simply means the real cost of something else that we forgo or benefit lost. .

a) Based on the information given above, the opportunity cost of producing lumber with regards to the units of rice will be:

= 100/300

= 1/3 units of rice

This means that 1/3 unit of rice will be given up for every 1 unit of lumber

To increase its lumber production by 6 units, then the units of rice that'll be sacrificed will be:

= 6 × 1/3

= 2 units of rice

Therefore, country faces an opportunity cost of 2 units of rice.