Table 3-5

-Refer to Table 3-5.Japan has an absolute advantage in
A)both goods and the United States has a comparative advantage in cars.
B)both goods and the United States has a comparative advantage in airplanes.
C)cars (but not airplanes) and the United States has a comparative advantage in airplanes.
D)airplanes (but not cars) and the United States has a comparative advantage in cars.

Question

Table 3-5
 
-Refer to Table 3-5.Japan has an absolute advantage in
A)both goods and the United States has a comparative advantage in cars. 
B)both goods and the United States has a comparative advantage in airplanes. 
C)cars (but not airplanes) and the United States has a comparative advantage in airplanes. 
D)airplanes (but not cars) and the United States has a comparative advantage in cars.

Quizplus · Accepted Answer

Japan has an absolute advantage in both goods if it can produce both more efficiently than the United States. The United States has a comparative advantage in airplanes if it can produce them at a lower opportunity cost compared to cars.

Table 3-5 -Refer to Table 3-5.Japan Has an Absolute Advantage in