Answer
See All the solution a-g below.
Work Step by Step
(a) to (c) is attached in image.
(d) Both countries produce cars at the same rate.
Thus neither country has the absolute advantage in producing cars. The US is able to produce grain at twice the rate of Japan, therefore Us has the absolute advantage.
(e) Japan has a comparative advantage as compare to the US in producing cars because they lose less production of grain by focusing on producing cars.
The US has a comparative advantage in the production of grain due to the fact that Japan has a comparative advantage in cars, America will, therefore, have a comparative advantage in the other good, grain.
(f) America - 200 million cars
500 million tons of grain.
Japan -
200 million cars,
250 million tons of grain.
(g) Both countries can have benefited from trade by taking advantage of their comparative advantages.
For example, if the US were to focus solely on producing on grain and Japan were to produce exclusively cars it would maximize production for each country.
