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With a Given Amount of Labor and Other Resources, Producers

Question 4

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With a given amount of labor and other resources, producers in the nation of Germany can produce either 100 SUVs or 50 sedans. Thus, two SUVs must be given up to produce each sedan. Using the same amount of labor and resources, producers in Japan can produce 40 SUVs or 40 sedans­so one SUV must be given up for each sedan produced. Based on this information, Japan has a comparative advantage in the production of sedans.

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