Daily Output of Japan and U.S.
Table 18.2
-Refer to Table 18.2.The opportunity cost of tractors in the U.S.is:

Question

Daily Output of Japan and U.S.
  Table 18.2
-Refer to Table 18.2.The opportunity cost of tractors in the U.S.is:

Quizplus · Accepted Answer

The opportunity cost of tractors in the U.S. is 1/4 stereo, which means that to produce one tractor, the U.S. must give up producing 1/4 stereo. This is lower than Japan's opportunity cost of tractors, which is 1/2 stereo. Therefore, the U.S. has a comparative advantage in producing tractors and should specialize in producing tractors while trading with Japan for stereos.