Suppose the U. S. and Japan can both produce airplanes and televisions and the U. S. has acomparative advantage in the production of airplanes while Japan has a comparative advantage in theproduction of televisions. Also suppose the U. S. has an absolute advantage in the production of bothairplanes and televisions. The U. S. shoulda. not trade airplanes or televisions with Japan. b. import airplanes from Japan and export televisions to Japan. c. export airplanes to Japan and import televisions from Japan. d. export both airplanes and televisions to Japan

Question

Business

Alisson Mcbride

27 July, 17:10

Suppose the U. S. and Japan can both produce airplanes and televisions and the U. S. has acomparative advantage in the production of airplanes while Japan has a comparative advantage in theproduction of televisions. Also suppose the U. S. has an absolute advantage in the production of bothairplanes and televisions. The U. S. shoulda. not trade airplanes or televisions with Japan. b. import airplanes from Japan and export televisions to Japan. c. export airplanes to Japan and import televisions from Japan. d. export both airplanes and televisions to Japan

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Answers (1)

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Odie · Answer 1

c. export airplanes to Japan and import televisions from Japan.

Explanation:

The comparative advantage refers to the situation in which a country is more efficient in the production of a good than the other countries and if each country specializes in the product that they can produce more efficiently there is an increase in the economic welfare. The comparative advantage also refers to the fact that one country can be more efficient at the production of all the products but in that case, countries will still benefit by specilizing in what they can produce at a lower opportunity cost and engage in trade. Because of that, the United States should produce airplines and Japan televisions and the answer is that the U. S. should export airplanes to Japan and import televisions from Japan.