How do you think the shift in the location of Toyota's production from Japan to the United States has altered the pattern of comparative advantage in automaking between the two countries?

A country has an absolute advantage in producing a good or service if the country can produce more output per worker than other countries.

When lean manufacturing was incorporated in Japanese industries, the production process became more organized and focused. Toyota started developinghigh-quality and relatively low-priced cars that threatened the dominant position of the U.S. Due to this,the U.S. government implementeda protectionist policy by restricting the sale of Japanese autos in the U.S. overtime. Toyota responded by building assembly plants in the United States.

Toyota's assembly plants in the United States brought along its lean production techniques, which then spread throughout American manufacturing industries.

The spreading of lean production techniques in America improved the efficiency of American automakers. It also altered American automaking industries' manufacturing cost, volume, and quality.

Both nations had an edge in manufacturing and could produce goods of higher quality and larger volumes. Thus, the pattern of comparative advantage altered due to the flourishing of lean manufacturing practices in the United States.