Automobiles and many other products are differentiated. As a result
A) the quality of imported automobiles is less than it could be.
B) different countries may each have a comparative advantage in producing different types of automobiles.
C) consumers of automobiles have difficulty deciding what type of imported automobile to buy.
D) we see countries specializing completely in the production of automobiles.

Question

Quizplus · Accepted Answer

Different countries may each have a comparative advantage in producing different types of automobiles due to variations in technology, labor skills, resources, and other factors. This leads to specialization and trade, allowing countries to focus on producing automobiles where they have efficiency, leading to a diverse market of differentiated products.

Automobiles and Many Other Products Are Differentiated