Answer:
a. What is the opportunity cost of producing rice in each country, stated in terms of cars?
In the U.S., the opportunity cost of producing a ton of rice is a 10th of a car, since producing a ton of rice requires 20 labor hours, and producing a whole car take 200 labor hours.
In China, a ton of rice has an opportunity cost a 5th of car.
b. What is the opportunity cost of cars, stated in terms of rice?
In the U.S., the opportunity cost is 10 tons of rice, and China is 5 tons of rice.
c. Which country has a comparative advantage in cars?
The U.S. has the comparative advantage because its opportunity cost in terms of tons of rice is lower than that of China.
d. Which country has a comparative advantage in rice?
China, because its opportunity cost in terms of cars is lower than that of the U.S.
