-Refer to Table 3-5. Which country has a comparative advantage in each product?
A) Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in neither good.
B) Canada has a comparative advantage in cars, and Japan has a comparative advantage in airplanes.
C) Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in cars.
D) Canada has a comparative advantage in neither good, and Japan has a comparative advantage in cars.

Question

-Refer to Table 3-5. Which country has a comparative advantage in each product?
A) Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in neither good. 
B) Canada has a comparative advantage in cars, and Japan has a comparative advantage in airplanes. 
C) Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in cars. 
D) Canada has a comparative advantage in neither good, and Japan has a comparative advantage in cars.

Quizplus · Accepted Answer

Comparative advantage is determined by which country can produce a good at a lower opportunity cost compared to others. Without the specific data from Table 3-5, the correct answer cannot be determined based on the information given. However, the principle of comparative advantage suggests that each country will have a lower opportunity cost in producing at least one of the goods, assuming differences in productivity between the countries.