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 microchip in Indonesia is _____ tire(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 microchip in Indonesia is _____ tire(s).

Quizplus · Accepted Answer

The opportunity cost of producing 1 microchip in Indonesia can be determined by the slope of the production possibility frontier (PPF). If the PPF shows that for every microchip produced, Indonesia has to give up producing 2 tires, then the opportunity cost of 1 microchip is 2 tires.

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