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Q. Assume US can produce Toyotas at cost of $18,000 per car and Chevrolets at $16,000 per car. In Japan, Toyotas can be produced at 1,000,000 yen and Chevrolets at 500,000 yen. In terms of Chevrolets Illustrate what is opportunity cost of producing Toyotas in each nation? Who has comparative advantage in producing Chevrolets? Assume Americans purchase 500,000 Chevrolets and 300,000 Toyotas each year and Japanese purchase far fewer of each. Utilizing productive efficiency as guide, which nation should produce Chevrolets and which should produce Toyotas?
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