Which of the following statements is true for the two countries illustrated in Figure 35.1?
A) Japan has an absolute advantage in motorcycles.
B) The United States has a comparative advantage in DVD players.
C) Japan has an absolute advantage in motorcycles, the United States in DVD players.
D) The United States has a comparative advantage in motorcycles, Japan in DVD players.

Question

Which of the following statements is true for the two countries illustrated in Figure 35.1?
A) Japan has an absolute advantage in motorcycles. 
B) The United States has a comparative advantage in DVD players. 
C) Japan has an absolute advantage in motorcycles, the United States in DVD players. 
D) The United States has a comparative advantage in motorcycles, Japan in DVD players.

Quizplus · Accepted Answer

From the graph, we can see that the United States is producing more DVD players with the same amount of resources as Japan. This means that the United States has a comparative advantage in DVD player production. We cannot determine anything about absolute advantage from the graph.

Which of the Following Statements Is True for the Two