American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers.
A. For this situation, construct a table analogous to the table in Figure 1.
B. Graph the production possibilities frontier of the American and Japanese economies.
C. For the United States, what is the opportunity cost of a car? Of grain? For Japan, what is the opportunity cost of a car? Of grain? Put this information in a table analogous to table
D. Which country has a comparative advantage in producing cars? In producing grain?
E. Which country has an absolute advantage in producing cars? In producing grain?