Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Japan should specialize in the production of
A) cars and import airplanes.
B) airplanes and import cars.
C) both goods and import neither good.
D) neither good and import both goods.

Question

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.Japan should specialize in the production of
A) cars and import airplanes. 
B) airplanes and import cars. 
C) both goods and import neither good. 
D) neither good and import both goods.

Quizplus · Accepted Answer

Japan has a comparative advantage in producing cars, so it should specialize in producing cars and import airplanes.

Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars