Question

The United States can produce 30 computers for every car it produces, and Japan can produce 15 computers for every car it produces. Based on this information, which statement is INCORRECT?

Answer 1

Japan has an absolute advantage in car production.

Step-by-step explanation:

The principle of absolute advantage refers to the ability of a country to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

A country with an absolute advantage can sell the good for less than a country that does not have the absolute advantage.

From the above case Japan is said to have absolute advantage because it can produce car at a lower cost than United States.