Let's simplify the given expression:

$\frac{2^{-1}}{2^2}$

Using the rule of exponents:

$\frac{a^m}{a^n} = a^{m-n}$

We subtract the exponents:

$2^{-1 - 2} = 2^{-3}$

Thus, the expression simplifies to:

$2^{-3} = \frac{1}{2^3} = \frac{1}{8}$

Among the provided answer choices, the closest is:

$\boxed{\frac{1}{2^3}}$

Would you like further explanation or details on any part of the solution?

Here are 5 follow-up questions to consider:

1. What is the general rule for multiplying exponents with the same base?
2. How do negative exponents affect the base number?
3. How would you solve if the base numbers were different?
4. What happens when the exponent is zero?
5. Can you convert $2^{-3}$ into decimal form?

Tip: Always apply the exponent rules systematically to simplify expressions involving powers of the same base.