Q.1.16 Japan has a comparative advantage over Germany in the production of cars if it:(1)Is able to produce cars at a faster rate than Germany;(2)Produces cars at a lower opportunity cost than Germany;(3)Has the absolute advantage in car production;(4)Exports more cars than Germany.

Comparative advantage is the advantage in which a country can produce a good relatively cheaper than…

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Japan has a comparative advantage over Germany in the production of cars if it:

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Q.1.16 Japan has a comparative advantage over Germany in the production of cars if it:
(1)
Is able to produce cars at a faster rate than Germany;
(2)
Produces cars at a lower opportunity cost than Germany;
(3)
Has the absolute advantage in car production;
(4)
Exports more cars than Germany.

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