Asked by Manar Altoblany on May 28, 2024
Verified
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.
Verified Answer
Learning Objectives
- 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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