Question

question 1 · 1 point if the us has comparative advantage in producing cars, this means select all that apply: □ the us can specialize in car production and trade with other countries. □ it can produce more cars than other countries. □ it has a lower production cost than other countries. □ the us has a lower opportunity cost of producing cars.

Explanation:

1. Recall the concept of comparative advantage: A country has a comparative advantage in producing a good if it has a lower opportunity cost of producing that good compared to other countries.

• For the option "the US can specialize in car production and trade with other countries": When a country has a comparative advantage in a good, specializing in its production and trading for other goods (which other countries have comparative advantage in) allows for gains from trade. So this is correct.
• For the option "it can produce more cars than other countries": This refers to absolute advantage (producing more quantity), not comparative advantage. So this is incorrect.
• For the option "it has a lower production cost than other countries": Comparative advantage is about opportunity cost, not necessarily monetary production cost. So this is incorrect.
• For the option "the US has a lower opportunity cost of producing cars": By definition of comparative advantage, this is correct.

Answer:

• the US can specialize in car production and trade with other countries.
• the US has a lower opportunity cost of producing cars.