Use the following to answer question:
-(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 tire in Indonesia is _____ microchip(s),while the opportunity cost of producing 1 tire in Malaysia is _____ microchip(s).

Question

Use the following to answer question: 
-(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 tire in Indonesia is _____ microchip(s),while the opportunity cost of producing 1 tire in Malaysia is _____ microchip(s).

Quizplus · Accepted Answer

The opportunity cost of producing 1 tire in Indonesia is 0.5 microchips because for every tire produced, Indonesia gives up the production of 0.5 microchips. In Malaysia, the opportunity cost of producing 1 tire is 2 microchips, as for every tire produced, Malaysia gives up the production of 2 microchips. This is determined by the slope of the production possibility frontier for each country.

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