Suppose China and India are both able to produce tea and cloth by only using labor. In China, it takes 1 unit of labor to produce 1 kilogram of tea and 2 units of labor to produce 1 meter of cloth. In India, it takes 2 units of labor to produce 1 kilogram of tea and 2 units of labor to produce 1 meter of cloth.
Correct Answer:
Verified
Q96: Trade will tend to equalize factor prices.
Q97: Trade due to comparative advantage tends to
Q98: Trade due to expanded markets differs from
Q99: Trade between countries in goods from different
Q100: When economies of scale exist over wide
Q102: When countries create a free trade area
Q103: When countries create a free trade area
Q104: A long-run equilibrium in an industry exists
Q105: Trade due to comparative advantage tends to
Q106: Was the rationale for the North American
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents