Assume, for China, that the domestic price of apples without international trade is higher than the world price of apples. This suggests that, in the production of apples,
A)China has a comparative advantage over other countries and China will import apples.
B)China has a comparative advantage over other countries and China will export apples.
C)other countries have a comparative advantage over China and China will import apples.
D)other countries have a comparative advantage over China and China will export apples.

Question

Quizplus · Accepted Answer

When the domestic price without international trade is higher than the world price, it indicates that other countries can produce apples at a lower cost, suggesting they have a comparative advantage. Therefore, China will import apples to benefit from the lower prices available internationally.

Assume, for China, That the Domestic Price of Apples Without