In China, many farmers have switched from producing rice to producing vegetables and fruit because they can earn a great deal more money from these specialty crops. Within China, there are some who applaud this change, but others worry that China soon may become dependent on rice imports. Even with the low cost of Chinese labor, does the fact that China is importing rice suggest that other countries now have a comparative advantage in rice production?
A) No, China must have a comparative advantage in rice if it imports rice.
B) Yes, but only if there are other countries with even cheaper labor.
C) Yes, countries with more expensive labor can offset that cost with abundant land and farm equipment.
D) Maybe, because rice is a standardized product, the role of innovation and creativity in its production is important.

Question

Quizplus · Accepted Answer

China may import rice if other countries have a comparative advantage due to factors like abundant land and advanced farm equipment, which can offset higher labor costs.

In China, Many Farmers Have Switched from Producing Rice to Producing