Consider two countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed. Textiles Beer China 5 10 South Africa 1 6 Q1 Which of the following statements are correct There is no opportunity for mutually beneficial trade between the two (2) countries. China has a comparative advantage
Consider two countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed. Textiles Beer China 5 10 South Africa 1 6 Q1 Which of the following statements are correct There is no opportunity for mutually beneficial trade between the two (2) countries. China has a comparative advantage
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
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Consider two countries, China and South Africa, both producing textiles and beer. The table below shows output rates per day in the two (2) countries, if all resources are fully and efficiently employed.
Textiles Beer
China 5 10
South Africa 1 6
Q1 Which of the following statements are correct
- There is no opportunity for mutually beneficial trade between the two (2) countries.
- China has a
comparative advantage in the production of textiles and beer. - South Africa has a comparative advantage in the production of beer.
- The countries will not trade with each other as China can produce more of both goods without trading with South Africa
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