Assume that at maximum production levels, Japan can produce either 100 CD's or 50 DVD's. The U.S. can produce either 90 CD's or 30 DVD's.
- Draw the PPF curves for each of these countries producing these two products.
- Who has the absolute advantage for each product? Why?
- Calculate the comparative advantage for each country in both CD and DVD production and show your results. Who has the comparative advantage for each product? Why?