Canada = 4 boots and 24 shirts USA = 24 boots, 6 shirts USA's opportunity cost of boots is 24/24 is 6/24 shirts USA's opportunity cost of 1 boots costs 0.25 shirts Canada's opportunity cost of 24/4 boots is 24/4 shirts Canada's opportunity cost 1 boot costs 6 shirts USA has forgo little resources (0.25)while Canada has to forgo a lot (6). Canada's opportunity cost of shirts 24/24 is 4/24 boots Canada's opportunity cost of 1 shirt is 0.167 boots USA opportunity cost of 6/6 shirts is 24/6 boots USA opportunity cost of 1 shirt costs 4 boots Different from Macro formula because it is quantity not hours

### Opportunity Cost Example

## Step1: Understanding Opportunity Cost### Opportunity cost is the cost of forgoing the next best alternative when making a decision. In this case, it is the number of shirts that each country can produce instead of producing one boot.## Step2: Calculating USA's Opportunity Cost of Boots### The USA can produce 24 boots or 6 shirts. Therefore, the opportunity cost of producing one boot in the USA is shirts, which simplifies to or 0.25 shirts.## Step3: Calculating Canada's Opportunity Cost of Boots### Canada can produce 4 boots or 24 shirts. Therefore, the opportunity cost of producing one boot in Canada is shirts, which simplifies to 6 shirts.## Step4: Comparing Opportunity Costs### Comparing the opportunity costs, the USA has a lower opportunity cost for producing boots (0.25 shirts) compared to Canada (6 shirts). This means the USA sacrifices fewer shirts to produce one boot.## Step5: Calculating USA's Opportunity Cost of Shirts### The USA can produce 6 shirts or 24 boots. Therefore, the opportunity cost of producing one shirt in the USA is boots, which simplifies to 4 boots.## Step6: Calculating Canada's Opportunity Cost of Shirts### Canada can produce 24 shirts or 4 boots. Therefore, the opportunity cost of producing one shirt in Canada is boots, which simplifies to or approximately 0.167 boots.## Step7: Comparing Opportunity Costs for Shirts### Comparing the opportunity costs, the USA has a higher opportunity cost for producing shirts (4 boots) compared to Canada (0.167 boots). This means Canada sacrifices fewer boots to produce one shirt.