If labor in China is less productive than labor in the United States in all areas of production, then:
A) both the United States and China can benefit from trade.
B) neither nation can benefit from trade.
C) China can benefit from trade but not the United States.
D) the United States can benefit from trade but not China

Question

Quizplus · Accepted Answer

Even if Chinese labor is less productive in all areas of production compared to the United States, there are still some products or services that China can produce at a lower cost than the United States. Therefore, both nations can still benefit from trade by specializing in producing the goods or services they can produce more efficiently and trading with each other.

If Labor in China Is Less Productive Than Labor in the United