Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars

question 76

Multiple Choice

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Japan should specialize in the production of

• A) cars and import airplanes.
• B) airplanes and import cars.
• C) both goods and import neither good.
• D) neither good and import both goods.

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Definitions:

Rule of Law

The principle that all members of a society, including those in government, are equally subject to publicly disclosed legal codes and processes.

Infrastructure

The basic physical and organizational infrastructure and services such as buildings, roads, and power facilities required for the functioning of a society or business.

Human Capital

The collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value.

Surplus Labor

This term refers to the portion of the labor force which is not currently being employed to its full potential, often leading to unemployment or underemployment in an economy.