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. The opportunity cost of producing 1 tire in Indonesia is _____ radio(s), while the opportunity cost of producing 1 tire in Malaysia is _____ radio(s).

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. The opportunity cost of producing 1 tire in Indonesia is _____ radio(s), while the opportunity cost of producing 1 tire in Malaysia is _____ radio(s).

Quizplus · Accepted Answer

Country Indonesia has a lower opportunity cost of producing tires as compared to its opportunity cost of producing radios, while Malaysia has a lower opportunity cost of producing radios as compared to its opportunity cost of producing tires. Therefore, Indonesia should produce more tires and Malaysia should produce more radios to maximize their production capabilities and efficiency.

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