Exhibit 19-2
In Exhibit 19-2, the United States should produce rice and trade its rice for Costa Rica's t-shirts.

Question

Exhibit 19-2
  In Exhibit 19-2, the United States should produce rice and trade its rice for Costa Rica's t-shirts.

Quizplus · Accepted Answer

According to the principle of comparative advantage, a country should specialize in producing and exporting the good for which it has a lower opportunity cost and import the good for which it has a higher opportunity cost. In Exhibit 19-2, the United States has a lower opportunity cost of producing rice compared to Costa Rica and a higher opportunity cost of producing t-shirts. Therefore, it should produce rice and trade it for Costa Rica's t-shirts.

Exhibit 19-2 in Exhibit 19-2, the United States Should Produce