What is the opportunity cost of producing steel in Country X?

To determine the opportunity cost of producing steel in Country X, it is essential to understand the concept of opportunity cost, which refers to the value of the next best alternative that is forgone when making a decision. In this case, the production of steel comes at the expense of producing bananas, assuming Country X also produces bananas.

If the opportunity cost of producing one unit of steel is expressed as a fraction or ratio of bananas, it indicates how many bananas must be given up to produce one additional unit of steel. For example, if the production of steel results in yielding only 1/5 of a banana being sacrificed for each unit of steel made, then that specific fraction accurately represents the opportunity cost.

When analyzing the choices, if the opportunity cost indeed reflects that for every unit of steel produced, only 1/5 of a banana is surrendered, then this fraction efficiently captures the trade-off, highlighting the relatively low impact on banana production as a result of focusing on steel production. This aligns with the fundamental principles of opportunity costs in production trade-offs, where the analysis should indicate the relative worth of what is being sacrificed to achieve another goal. Knowing that bananas are produced in conjunction with steel provides the context needed to arrive at the conclusion that the opportunity cost