Figure 3.1China - US Trade Possibilities

-Considering Figure 3.1 which of the following would be true?
A) China has more of both labor and capital than the US.
B) The US has more of both labor and capital than China.
C) The US is relatively capital abundant and China is relatively labor abundant.
D) The US is relatively labor abundant and China id relatively capital abundant.

Question

Figure 3.1China - US Trade Possibilities
 
-Considering Figure 3.1 which of the following would be true?
A) China has more of both labor and capital than the US. 
B) The US has more of both labor and capital than China. 
C) The US is relatively capital abundant and China is relatively labor abundant. 
D) The US is relatively labor abundant and China id relatively capital abundant.

Quizplus · Accepted Answer

In Figure 3.1, the vertical axis represents the relative amount of capital and the horizontal axis represents the relative amount of labor in China and the US. The US is located towards the capital-rich end of the graph, indicating that it is relatively capital abundant, while China is located towards the labor-rich end, indicating that it is relatively labor abundant. Therefore, option C is correct. Options A and B are incorrect because neither country is shown to have more of both labor and capital than the other. Option D is also incorrect because the graph shows the opposite of what is suggested, with the US being capital abundant and China being labor abundant.