Question

Japan has the ability to produce either 10,000 televisions or 5,000 cars in a day. The United States has the ability to produce 20,000 televisions or 15,000 cars in a day. Japan has the lower opportunity cost of producing televisions, while the United States has the lower opportunity cost of producing cars.a. The United States has the comparative advantage in:

Answer 1

Answer:

The United States has the comparative advantage in car production.

Explanation:

• Japan has a lower opportunity cost of producing televisions compared to cars, implying that Japan basically has to give up or sacrifice or trade off relatively less number of cars to produce one more television compared to the production of one more car.
• Alternatively, US has a lower opportunity cost of producing cars relative to televisions meaning that US has to give up, sacrifice or trade off less number of televisions to manufacture one more car in comparison to the production of one more television.
• Hence, in this case,US has a comparative advantage in the production of cars and Japan has a comparative advantage in production of television and both countries can produce these respective commodities by using relatively less productive resources or factor inputs.