Final answer:
The opportunity cost for Mexico producing one space shuttle is the foregone production of other goods, like shoes or refrigerators, which it could trade with other countries. Countries focus on producing goods with the lowest opportunity cost to take advantage of comparative advantages and international trade.
Step-by-step explanation:
The question seeks to understand the concept of opportunity cost in the context of international trade between Mexico and the United States, using the example of producing space shuttles versus other goods. Opportunity cost is a foundational concept in economics, which refers to the benefit that is missed or given up when choosing one alternative over another. In this scenario, if Mexico decides to produce a space shuttle, it must forego the production of other goods, such as shoes or refrigerators, to which it might have a comparative advantage. Conversely, if Mexico focuses on producing shoes, it can trade with the United States, which has a lower opportunity cost for producing refrigerators, thereby benefiting from international trade.
Mexico's opportunity cost of producing one space shuttle can be understood by looking at what Mexico gives up in the process. For instance, if manufacturing a space shuttle means the country cannot produce a certain number of shoes or refrigerators, that lost production is its opportunity cost. This concept is important because it illustrates why countries specialize in the production of goods for which they have a comparative advantage, allowing them to maximize efficiency and gains from trade.