Suppose Japan produces Widget A at the lowest cost.Then, Sweden discovers and uses new technology to produce Widget A at a slightly lower cost.What could Japan do to increase its comparative advantage in Widget A?
A) Japan could specialize on aspects of Widget A for which it is more productive relative to Sweden.
B) Japan can produce less of Widget A.
C) Japan can use its manufacturing sector to produce a different kind of widget.
D) Japan can continue to produce Widget A with no changes in production.

Question

Quizplus · Accepted Answer

Japan can increase its comparative advantage in Widget A by specializing on aspects of Widget A for which it is more productive relative to Sweden. This would allow Japan to produce Widget A more efficiently and at a lower cost, making it more competitive in the global market.

Suppose Japan Produces Widget a at the Lowest Cost