Comparative and Absolute Advantage Quick Check

Question

2 of 52 of 5 Items
Question
If both Japan and the United States directed all of their resources to the production of laptops, the United States would produce a greater quantity laptops in any period of time. Given this information, which of the following is necessarily true?(1 point)
Responses

The United States has a comparative advantage in laptop production.
The United States has a comparative advantage in laptop production.

The United States has an absolute advantage in laptop production.
The United States has an absolute advantage in laptop production.

Japan has a comparative advantage in laptop production.
Japan has a comparative advantage in laptop production.

Japan has an absolute advantage in laptop production.

Answer 1

Based on the information provided, the correct response is:

The United States has an absolute advantage in laptop production.

Absolute advantage refers to the ability of a country to produce more of a good or service than another country, given the same amount of resources. Since it is stated that the U.S. would produce a greater quantity of laptops than Japan when both allocate all their resources to laptop production, the U.S. holds an absolute advantage in this scenario.

Comparative advantage, on the other hand, involves considering opportunity costs, which is not determined by just knowing the quantity produced. Thus, we cannot determine which country has a comparative advantage based solely on the information given.