Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-26. Japan has an absolute advantage in the production of
A)cars and a comparative advantage in the production of cars.
B)cars and a comparative advantage in the production of airplanes.
C)neither good and a comparative advantage in the production of cars.
D)neither good and a comparative advantage in the production of airplanes.

Question

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
​ 
-Refer to Table 3-26. Japan has an absolute advantage in the production of
A)cars and a comparative advantage in the production of cars. 
B)cars and a comparative advantage in the production of airplanes. 
C)neither good and a comparative advantage in the production of cars. 
D)neither good and a comparative advantage in the production of airplanes.

Quizplus · Accepted Answer

Japan has an absolute advantage in the production of cars if it can produce more cars than another country with the same resources. It also has a comparative advantage in cars if it has a lower opportunity cost for producing cars compared to airplanes.

Table 3-26 Assume That Japan and Korea Can Switch Between Producing Cars