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 trade 1 microchip for 1 tire,the most that Indonesia can consume is _____ microchips and _____ tires,while the most that Malaysia can consume is _____ microchips and _____ tires.

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 trade 1 microchip for 1 tire,the most that Indonesia can consume is _____ microchips and _____ tires,while the most that Malaysia can consume is _____ microchips and _____ tires.

Quizplus · Accepted Answer

The point where Indonesia produces 600 microchips and 600 tires and Malaysia produces 400 microchips and 600 tires is the point on both of their production possibility curves where they have the same opportunity cost for each good. This means they will be able to trade 1 microchip for 1 tire without either country being worse off. At this point, Indonesia can consume up to 600 microchips and 600 tires, while Malaysia can consume up to 1000 microchips and 600 tires. Therefore, the most Indonesia can consume is 600 microchips and 600 tires, and the most Malaysia can consume is 1000 microchips and 600 tires.

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