Table 18-4
$\begin{array}{ccccccc}
\text { Quantity }&\text { Quantity }&\text { Quantity }&\text { Quantity }&\
\text { Price per } & \text { Demanded } & \text { Supplied } & \text { Demanded } & \text { Supplied } \
\text { TV } & \text { in United States } & \text { in United States } & \text { Japan } & \text { Japan } \
\underline {\text { (dollars) }} &\underline { \text { (thousands) }} & \underline { \text { (thousands) }} &\underline { \text { (thousands) }} & \underline { \text { (thousands) }} \
100 & 100 & 10 & 100 & 25 \
200 & 85 & 20 & 85 & 50 \
300 & 70 & 30 & 70 & 70 \
400 & 60 & 40 & 60 & 80 \
500 & 50 & 50& 50 & 90 \
600 & 40 & 60 & 40 & 100 \
700 & 30 & 70 & 30 & 110 \
800 & 30 & 80 & 20 & 120
\end{array}$
-Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, which country will export television sets and how many?
A) Japan will export 20,000 television sets to the United States.
B) Japan will export 30,000 television sets to the United States.
C) The United States will export 20,000 television sets to Japan.
D) The United States will export 40,000 television sets to Japan.

Question

Table 18-4
 $\begin{array}{ccccccc}
\text { Quantity }&\text { Quantity }&\text { Quantity }&\text { Quantity }&\
\text { Price per } & \text { Demanded } & \text { Supplied } & \text { Demanded } & \text { Supplied } \
\text { TV } & \text { in United States } & \text { in United States } & \text { Japan } & \text { Japan } \
\underline {\text { (dollars) }} &\underline { \text { (thousands) }} & \underline { \text { (thousands) }}  &\underline { \text { (thousands) }} & \underline { \text { (thousands) }}  \
100 & 100 & 10 & 100 & 25 \
200 & 85 & 20 & 85 & 50 \
300 & 70 & 30 & 70 & 70 \
400 & 60 & 40 & 60 & 80 \
500 & 50 & 50& 50 & 90 \
600 & 40 & 60 & 40 & 100 \
700 & 30 & 70 & 30 & 110 \
800 & 30 & 80 & 20 & 120
\end{array}$
-Table 18-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other, which country will export television sets and how many?
A) Japan will export 20,000 television sets to the United States.
B) Japan will export 30,000 television sets to the United States.
C) The United States will export 20,000 television sets to Japan.
D) The United States will export 40,000 television sets to Japan.

Quizplus · Accepted Answer

To determine which country will export television sets, we need to compare the prices of television sets in both countries. In the United States, at a price of $300, the quantity demanded and quantity supplied are equal, which means that this is the equilibrium price. In Japan, at a price of $500, the quantity demanded and quantity supplied are equal, which means that this is the equilibrium price. Therefore, the United States has a comparative advantage in producing television sets at a lower cost than Japan. As a result, Japan will export television sets to the United States. The quantity of television sets that Japan will export is the difference between the quantity supplied in Japan and the quantity demanded in the United States at the equilibrium price of $500. This is 25,000 - 50,000 = -25,000. Since the answer cannot be negative, the correct answer is 20,000 television sets, which is choice A.

Table 18-4 -Table 18-4 Presents the Demand and Supply Schedules for Television