Multiple Choice
Figure 3.1China - US Trade Possibilities
-Considering Figure 3.1 prior to trade both China's and the US production of textiles and aircraft is 19 and 9.Which of the following represents the pre-trade situation?
A) China has a comparative advantage in the production of textiles and the US has a comparative advantage in the production of aircraft.
B) China has a comparative advantage in the production of aircraft and the US has a comparative advantage in the production of textiles.
C) China has an absolute advantage in the production of both textiles and aircraft.
D) The US has an absolute advantage in the production of both textiles and aircraft.
Correct Answer:
Verified
Correct Answer:
Verified
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