Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in
A) airplanes.
B) automobiles.
C) both goods.
D) neither good.

Question

Quizplus · Accepted Answer

The U.S. has a lower opportunity cost for producing airplanes compared to automobiles, as it sacrifices fewer automobiles per airplane than Japan does. Therefore, the U.S. should specialize in airplanes.

Assume the United States Can Use a Given Amount of Its