Question: Germany and Japan both produce cars and beer. The table below lists production possibilities per worker in each country (for example, one worker in Germany produces 8 cars or 10 cases of beer).
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a. Which nation has an absolute advantage in car production? Which one has an absolute advantage in beer production? Explain your answers.
b. Which nation has a comparative advantage in car production? Which one has a comparative advantage in beer production? Explain your answers.