In the Past Two Decades the United States Lost Its

question 119

Multiple Choice

In the past two decades the United States lost its comparative advantage in automobiles to Japan.What factor was most responsible for the development of Japan's comparative advantage in automobiles?

• A)Japanese firms excelled in process technology.
• B)Japan has abundant supplies of labor.
• C)Japanese firms benefited from external economies.
• D)Japan has abundant supplies of natural resources needed to produce automobiles.

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Definitions:

Invisible Hand Principle

The tendency of market prices to direct individuals pursuing their own interests to engage in activities promoting the economic well-being of society.

Price-Taker Markets

Markets in which individual buyers or sellers have no influence over the price of a product, typically due to the product being a commodity with many competitors.

Low Entry Barriers

Conditions that make it easy for new competitors to enter a market, including minimal financial, regulatory, or technological requirements.

Homogeneous Product

A product that is identical in all aspects from all producers, making it indistinguishable among suppliers.