Final answer:
To determine which country has a comparative advantage in rubber production, one must analyze opportunity cost data, which is not provided here. Each country should specialize in producing the good for which it has a lower opportunity cost. Marketable permits can lead to cost-efficient pollution reduction in the wooden chair industry.
Step-by-step explanation:
The student question pertains to the production and opportunity cost associated with bamboo and rubber in Malaysia, along with supply and demand dynamics. The primary focus is on the economic concepts of comparative advantage and absolute advantage, which are essential in determining which countries should specialize in producing certain goods. It is essential to analyze data on production capabilities and opportunity costs to calculate the advantages for Japan and Malaysia.
Without specific data provided for rubber production, I cannot calculate the opportunity cost of producing 10 additional tons of rubber in both countries to determine comparative advantage. However, the concept can be explained: a country has a comparative advantage when it can produce a good at a lower opportunity cost than another country. If a country has the ability to produce more of a good using the same amount of resources as another country, it has an absolute advantage.
Regarding the specialization, Japan should specialize in the product it has a comparative advantage in, which means it can produce at a lower opportunity cost compared to Malaysia. Conversely, Malaysia should specialize in the product where its opportunity cost of production is less than that of Japan.
Considering the scenario with the four firms Elm, Maple, Oak, and Cherry, the cost of reducing pollution and the use of marketable permits are both measures to decrease environmental impact. Marketable permits would allow firms with lower pollution reduction costs to sell their excess permits to other firms, potentially leading to a more cost-efficient pollution reduction across the industry.