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-(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia specialize completely in the production of the good of their comparative advantage,the two nations together will produce _____ tires and _____ microchips.

Question

Use the following to answer question: 
-(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia specialize completely in the production of the good of their comparative advantage,the two nations together will produce _____ tires and _____ microchips.

Quizplus · Accepted Answer

When Indonesia specializes in producing tires and Malaysia specializes in producing microchips, the production point will be at the far right of Indonesia's production possibilities curve (which represents its comparative advantage in tire production) and at the very top of Malaysia's production possibilities curve (which represents its comparative advantage in microchip production). As shown in the figure, this point represents a production level of 1,200 tires and 1,600 microchips.

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