If Japan Has a Comparative Advantage Over the United States

Multiple Choice

If Japan has a comparative advantage over the United States in the production of new cars and can sell a new car for an average price of $22,000, while the United States can sell a new car for an average price of $25,000, if the two countries engage in trade, the terms of trade will be

A) less than $22,000.
B) somewhere between $22,000 and $25,000.
C) $23,500 exactly.
D) more than $25,000.