Answer to Question #77807 in Microeconomics for Kay

Question

American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. construct a table

Answer 1

Amount produced per year (million)
Car Grain
America 400 1000
Japan 400 500

Neither country has an absolute advantage in producing cars, because they are equally productive (the same output per worker); America has an absolute advantage in producing grain, because it is more productive (greater output per worker).
Japan has a comparative advantage in producing cars, because it has a lower opportunity cost in terms of grain given up. The United States has a comparative advantage in producing grain, because it has a lower opportunity cost in terms of cars given up.