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

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

Quizplus · Accepted Answer

From the figure, we can see that Indonesia can produce up to 600 radios and 600 tires (point B on the graph), while Malaysia can produce up to 1000 radios and 600 tires (point C on the graph). If they trade 1 radio for 1 tire, Indonesia will consume 300 radios and 600 tires (moving along the horizontal axis to point A), and Malaysia will consume 800 radios and 200 tires (moving along the vertical axis to point A). Therefore, the most Indonesia can consume is 300 radios and 600 tires, while the most Malaysia can consume is 800 radios and 200 tires. The only option that matches these numbers is D.

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