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Figure: Comparative Advantage
-(Figure: Comparative Advantage) The figure illustrates both the U.S. and Japanese production possibilities frontiers for TVs and wheat. Based on this information, which of the following is TRUE?
A) The United States has the comparative advantage in the production of TVs.
B) The United States has the comparative advantage in the production of wheat.
C) Japan has the comparative advantage in the production of wheat.
D) Japan has the absolute advantage in the production of TVs.

Question

Use the following to answer questions:
Figure: Comparative Advantage 
-(Figure: Comparative Advantage) The figure illustrates both the U.S. and Japanese production possibilities frontiers for TVs and wheat. Based on this information, which of the following is TRUE?
A) The United States has the comparative advantage in the production of TVs. 
B) The United States has the comparative advantage in the production of wheat. 
C) Japan has the comparative advantage in the production of wheat. 
D) Japan has the absolute advantage in the production of TVs.

Quizplus · Accepted Answer

The United States has the comparative advantage in the production of wheat if it can produce wheat at a lower opportunity cost than Japan.

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