Table 3-5 -Refer to Table 3-5.Japan Has an Absolute Advantage in

question 12

Multiple Choice

Table 3-5

-Refer to Table 3-5.Japan has an absolute advantage in

• A)both goods and the United States has a comparative advantage in cars.
• B)both goods and the United States has a comparative advantage in airplanes.
• C)cars (but not airplanes) and the United States has a comparative advantage in airplanes.
• D)airplanes (but not cars) and the United States has a comparative advantage in cars.

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Definitions:

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-term average cost, allowing it to be competitively viable.

3-D Printers

3-D printers are machines that create three-dimensional objects by adding material layer by layer, based on digital models.

Third Industrial Revolution

The period characterized by the digital revolution and the use of electronics and information technology to automate production.

Law of Diminishing Returns

A principle stating that as one factor of production is increased while others are held constant, there comes a point at which the marginal gain in output begins to decrease.