With a given amount of labor and other resources, producers in the nation of Germany can produce either 100 SUVs or 50 sedans. Thus, two SUVs must be given up to produce each sedan. Using the same amount of labor and resources, producers in Japan can produce 40 SUVs or 40 sedansso one SUV must be given up for each sedan produced. Based on this information, Japan has a comparative advantage in the production of sedans.

Question

With a given amount of labor and other resources, producers in the nation of Germany can produce either 100 SUVs or 50 sedans. Thus, two SUVs must be given up to produce each sedan. Using the same amount of labor and resources, producers in Japan can produce 40 SUVs or 40 sedans­so one SUV must be given up for each sedan produced. Based on this information, Japan has a comparative advantage in the production of sedans.

Quizplus · Accepted Answer

Japan has a lower opportunity cost for producing sedans (1 SUV per sedan) compared to Germany (2 SUVs per sedan), indicating a comparative advantage in sedan production.

With a Given Amount of Labor and Other Resources, Producers