Final answer:
Some businesses located outside the United States have an advantage in production efficiency due to comparative advantage. The United States may have an absolute advantage, but other countries may specialize in certain goods due to lower production costs or specialized labor. The example of Apple's iPhone production illustrates the concept of comparative advantage.
Step-by-step explanation:
When it comes to production efficiency, some businesses located outside the United States have an advantage. This can be seen through the concept of comparative advantage. Comparative advantage is when a country can produce a good or service at a lower opportunity cost than another country.
For example, let's consider the trade between the United States and Mexico mentioned in the reference material. The United States has an absolute advantage in productivity as it takes fewer workers to produce both shoes and refrigerators compared to Mexico. However, Mexico may have a comparative advantage in producing certain goods due to lower production costs or specialized labor.
One real-life example is Apple's iPhone production. The United States has a comparative advantage in designing and marketing the iPhone, while China has a comparative advantage in assembling it due to its skilled labor force. Korea, on the other hand, has a comparative advantage in producing components such as screens and computer chips.