Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 1 - Limits, Alternatives, and Choices - Discussion Questions: 10

Answer

The opportunity cost of producing the robot locally is equivalent to 10,000 pizzas. Comparatively, the opportunity cost of getting the robot from another country is equivalent to 9000 pizzas. Therefore, international trade and specialization lower the country's opportunity cost, and this increases the capacity of the country to go outside the current production possibilities curve.

Work Step by Step

Specialization and trade increase the capacity of a country to get more resources and to discover technologies that foster high production.
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