Question

Before lean manufacturing innovations, Japan mostly sold consumer electronics to the United States. How did lean manufacturing innovations alter Japan’s comparative advantage vis-à-vis the United States?

Answer 1

Answer:

Thus, lean manufacturing technology helped to improve the comparative advantage position of Japan vis-a vis United States.

Explanation:

Lean manufacturing innovations in Japan have helped to improve efficiency in the production process in the country and thus have helped to reduce the time required for operations. This has reduced the opportunity cost of production in Japan and increased its comparative advantage in the goods for which lean manufacturing was used.

This helped to increase the range of commodities that Japan exported to the United States due to improvement in the manufacturing technology. Thus, this helped to improve the overall terms of trade in the country and also increased gains from trade.