Question

If the United States could produce five televisions per hour of labor and China could produce three televisions per hour of labor, would it necessarily follow that the United States should specialize in television production? Why or why not?

Answer 1

United States would not necessarily specialise in the production of television here and this is because only one good is given which tells about the absolute advantage where the specialisation of production depends on the comparative advantage of the opportunity cost of production where for opportunity cost calculation you need at least two goods which is not given here and that is the reason why it's not necessary that United States to specialise in in production of television where if it has a comparative disadvantage China can specialise in the production of television as well.