If the opportunity cost of producing a T-shirt is ________ in China than in the United States,China has ________ advantage in producing T-shirts.
A) lower; a comparative
B) lower; an absolute
C) higher; a comparative
D) higher; an absolute
E) higher; no

Question

Quizplus · Accepted Answer

If the opportunity cost of producing a T-shirt is lower in China than in the United States, it means that China can produce T-shirts at a lower cost (in terms of alternative goods or services that could have been produced instead). This gives China a comparative advantage in producing T-shirts compared to the United States. Option B is incorrect because an absolute advantage would mean that China can produce T-shirts at a lower cost in terms of resources or labor compared to the United States, which is not given in the question. Option C and D are incorrect because if the opportunity cost is higher, it means that China would have to give up more of other goods or services to produce one T-shirt, indicating a comparative or absolute disadvantage. Option E is also incorrect as it is not a valid answer choice.

If the Opportunity Cost of Producing a T-Shirt Is ________