Question

1. Assume at maximum production levels, Japan can produce either 100 CDs or 500 DVDs. The U.S. can produce either 90 CDs or 30 DVDs.
a. Draw the PPF curves for each of these countries producing these two products.
b. Who has the absolute advantage for each product? Why?
c. Calculate the comparative advantage for each country in both CD and DVD production and show your results. Who has the comparative advantage and why?

Answer 1

Answer:

CDs or 500 DVDs. The U.S. can produce either 90 CDs or 30 DVDs.

Explanation: