If Japanese Workers Receive Lower Wages in the Production of Autos

question 5

Multiple Choice

If Japanese workers receive lower wages in the production of autos than do American workers:

• A) Japan will have a comparative advantage in the production of autos
• B) Japan will have an absolute advantage in the production of autos
• C) Production costs will be lower in Japan than in the U.S.
• D) Production costs could be lower in the U.S.if American labor productivity is higher than the Japanese

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Definitions:

Rose

A type of flowering plant belonging to the genus Rosa, in the family Rosaceae, known for its beauty and fragrance; often symbolizes love and affection.

Doubled

Increased by 100 percent; made twice as large or numerous.

Quadrupled

Quadrupled in amount or worth.

Trade Deficit

A situation that occurs when a country imports more goods and services than it exports, resulting in a negative balance of trade.