Question

If the USA can produce 12,000 personal computers or 16,000 TVs, and Japan can produce 10,000 personal computers or 30,000 TVs, then it follows that a. the USA does not have an absolute advantage in TVs. b. the USA does not have an absolute advantage in computers. c. Japan has an absolute advantage in both TVs and computers. d. the USA has an absolute advantage in both TVs and computers.

Answer 1

The USA does not have an absolute advantage in either TVs or computers.

Step-by-step explanation:

The USA does not have an absolute advantage in either TVs or computers.

To determine absolute advantage, we compare the production capabilities of different countries. In this case, the USA can produce 12,000 personal computers or 16,000 TVs, while Japan can produce 10,000 personal computers or 30,000 TVs. Since Japan can produce more TVs than the USA, the USA does not have an absolute advantage in TVs.

Similarly, since the USA can produce more personal computers than Japan, Japan does not have an absolute advantage in computers.

Therefore, option d is incorrect as the USA does not have an absolute advantage in both TVs and computers.

Answer 2

a. the USA does not have an absolute advantage in TVs.

Step-by-step explanation:

Absolute advantage is an economic term that describes the relative ease with which a country is able to produce a good compared to other producers.

The country that has absolute advantage will produce more numbers a product with the same resources as the other producer.

In the given scenario USA can produce 12,000 personal computers compared to 10,000 personal computers by Japan. So they have absolute advantage in producing personal computers.

Japan can produce 30,000 TVs compared to 16,000 TVs by USA. So Japan has absolute advantage in producing TVs