Suppose the United States has a lower opportunity cost in producing corn than Japan,and Japan has a lower opportunity cost in producing motorcycles than the United States,then the United States has:

Question

Quizplus · Accepted Answer

The concept of comparative advantage states that a country should specialize in producing and exporting goods in which its opportunity cost is lower compared to other countries. In this case, the United States has a lower opportunity cost in producing corn than Japan, while Japan has a lower opportunity cost in producing motorcycles than the United States. Therefore, the United States has a comparative advantage in producing corn, while Japan has a comparative advantage in producing motorcycles. This means that if both countries specialize in producing the goods in which they have a comparative advantage, they can trade with each other, and both will be better off.

Suppose the United States Has a Lower Opportunity Cost in Producing