Essentials of Economics 7th Edition by Gregory Mankiw

Exercise 21

Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor and producing a shirt takes 4 hours of labor. What will these nations trade?
A) China will export aircraft, and the United States will export shirts.
B) China will export shirts, and the United States will export aircraft.
C) Both nations will export shirts.
D) There are no gains from trade in this situation.