Which of the following best describes the comparative advantage of the two countries illustrated in Figure 35.1?

Question

Quizplus · Accepted Answer

The country with a lower opportunity cost of producing a good has a comparative advantage in that good. In Figure 35.1, Japan has a lower opportunity cost of producing motorcycles compared to DVD players (shown by the steeper slope of their production possibility curve for motorcycles). On the other hand, the United States has a lower opportunity cost of producing DVD players compared to motorcycles (shown by the steeper slope of their production possibility curve for DVD players). Therefore, Japan has a comparative advantage in motorcycles and the United States has a comparative advantage in DVD players. Option C correctly reflects this.

Which of the Following Best Describes the Comparative Advantage of the Two