1 ) Which of the following statements are correct? A)China has the comparative a
ID: 1167323 • Letter: 1
Question
1 ) Which of the following statements are correct?
A)China has the comparative advantage for both TVs and cameras
B)China has the comparative advantage for TVs because it has a lower opportunity cost for TV than Japan
C)Japan has the comparative advantage for TVs because it has a lower opportunity cost for TVs than China
D)Japan has the comparative advantage for cameras because it has a higher opportunity cost for cameras than China
E)Japan has the comparative advantage for cameras because it has a lower opportunity cost for cameras than China
F)China has the comparative advantage for TVs because it has a higher opportunity cost for cameras than Japan
2)After specialization and trade according to comparative advantage and with terms of trade of 1 TV for 2 cameras; if China trades 7 TVs to Japan
More than 1 answer is correct - Check all that applies
A)Japan will trade 14 cameras to China
B) Japan will not trade with China because it has a comparative advantage in TVs
C) Japan will gain 4 TVs compared to its self-sufficient output
D)Japan will trade 3.5 cameras to China
Explanation / Answer
1.A,B,D...
THE ABOVE DATA SHOWS CHINA CAN PRODUCE MORE NUMBER OF TVS WHEN IT PRODUCES ZERO CAMERAS THAN JAPAN IN THE SAME WAY CAMERAS . SO IT HAVE COMPARATIVE ADVANTAGE ON BOTH THE GOODS . JAPAN HAVE TO FORGO MORE CAMERAS FOR PRODUCING 1 TV THAN CHINA . SO CHINA HAVE LOWER OPPORTUNITY COST THAN CHINA.
2.C SAME EXPLAINATION . CHINA CAN PRODUCE MORE TVS THAN JAPAN . BY TRADING JAPAN CAN GAIN MORE TVS THAN BY PRODUCING ITSELF.
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