We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that China had a comparative advantage in silk. no comparative advantage could exist because the technology was not diffused. China exported silk for political reasons even though it had no comparative advantage. China had an absolute advantage, but not a comparative advantage in silk. China was unable to profit by exporting silk because it was unknown in the rest of the world.
We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that China had a comparative advantage in silk. no comparative advantage could exist because the technology was not diffused. China exported silk for political reasons even though it had no comparative advantage. China had an absolute advantage, but not a comparative advantage in silk. China was unable to profit by exporting silk because it was unknown in the rest of the world.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:We know that in antiquity, China exported
silk because no one in any other country
knew how to produce this product. From this
information we know that
China had a comparative advantage in silk.
no comparative advantage could exist because
the technology was not diffused.
China exported silk for political reasons even
though it had no comparative advantage.
China had an absolute advantage, but not a
comparative advantage in silk.
China was unable to profit by exporting silk
because it was unknown in the rest of the
world.
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