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Imagine there are only two countries--Japan and Indonesia-- producing refrigerators and cars. The cost of labor and capital is the same in each country. It
Imagine there are only two countries--Japan and Indonesia-- producing refrigerators and cars. The cost of labor and capital is the same in each country. It takes Japan 60 units of labor and capital to produce a car and 30 units of labor and capital to produce a refrigerator. For Indonesia, it takes 75 units of labor and capital to produce a car and 90 units to produce a refrigerator. (You may assume that people want cars as badly as refrigerators and are willing to pay the same amount for each.) According to the Theory of RELATIVE Advantage: Group of answer choices Japan should be allowed to make both car and refrigerator and Indonesia nothing; Indonesia should be allowed to make both the car and the refrigerator and Japan nothing; Japan should make cars and Indonesia refrigerators; Japan should make refrigerators and Indonesia cars
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