Asked by Manar Altoblany on May 28, 2024

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The United States can produce 30 computers for every car it produces,and Japan can produce 15 computers for every car it produces.Based on this information,which statement is INCORRECT?

A) The United States should specialize in computer production.
B) Japan has the comparative advantage in car production.
C) There will be gains from trade if the United States exports computers to Japan.
D) Japan has an absolute advantage in car production.

Comparative Advantage

The ability of an individual or country to produce a certain good or service at a lower opportunity cost than others.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than competitors.

Computers

Electronic devices capable of executing a set of instructions to perform a vast array of tasks, from basic calculations to complex data processing and analysis.

  • Explain the difference between absolute and comparative advantage.
  • Apply the concepts of opportunity cost and comparative advantage to analyze trade patterns between countries.
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JB
Jaquaisha BroadhurstJun 01, 2024
Final Answer :
D
Explanation :
The statement "Japan has an absolute advantage in car production" is incorrect. Absolute advantage refers to a country's ability to produce a good using fewer resources than another country. The information provided only gives the ratio of computers produced to cars produced, so we cannot determine which country has an absolute advantage in car production.