Question

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What is the benefit of the U.S. producing only Product B and Japan producing only Product A?

a) Because of comparative advantage, both countries can produce a greater amount of products.


b) Because of absolute advantage, both countries can produce a greater amount of products.


c) The two countries can produce enough of all products individually to meet all of their needs.


d) The total output of product B increases by 300,000 total units.

Answer 1

Because of comparative advantage, both countries can produce a greater amount of products.