Solved

If a Comparative Advantage Implies That a Country Can Produce

Question 49

Essay

If a comparative advantage implies that a country can produce a product at a lower opportunity cost than another country then why do we see two countries often trading the same goods? For instance, for most agricultural products the U.S. has a comparative advantage. Japan, one of America's largest trading partners has a comparative advantage in the production of most economy cars. Explain what is going on here when we still see the U.S. exporting cars to Japan and the U.S. importing some foods from Japan.

Correct Answer:

verifed

Verified

First of all not all goods are homogeneo...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions