Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Japan has an absolute advantage in the production of
A) cars and a comparative advantage in the production of cars.
B) cars and a comparative advantage in the production of airplanes.
C) neither good and a comparative advantage in the production of cars.
D) neither good and a comparative advantage in the production of airplanes.

Question

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.Japan has an absolute advantage in the production of
A) cars and a comparative advantage in the production of cars. 
B) cars and a comparative advantage in the production of airplanes. 
C) neither good and a comparative advantage in the production of cars. 
D) neither good and a comparative advantage in the production of airplanes.

Quizplus · Accepted Answer

Japan has an absolute advantage in the production of cars because it can produce cars with fewer resources than the United States.

Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars