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Figure: The Production Possibilities for Two Countries
-(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. If Malaysia specializes completely in the production of the good of its comparative advantage, it will produce:

Question

Use the following to answer questions:
Figure: The Production Possibilities for Two Countries 
-(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. If Malaysia specializes completely in the production of the good of its comparative advantage, it will produce:

Quizplus · Accepted Answer

According to the theory of comparative advantage, Malaysia should specialize completely in producing radios as it can produce 800 radios in one year with its resources while it can only produce 400 tires. Therefore, Malaysia can produce 1,600 radios (2 × 800) in two years.

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