Suppose that Bolivia is labor abundant, and the production of trinkets is labor intensive. Which of the following statements would be false?
A) The relative price of labor would tend to be low in Bolivia.
B) Bolivia would tend to export trinkets.
C) Bolivia does not have a comparative advantage in trinkets.
D) Bolivia has a comparative advantage in trinkets.
E) Bolivia will not trade with Chile.

Question

Quizplus · Accepted Answer

Bolivia, being labor abundant, would have a comparative advantage in producing labor-intensive goods like trinkets, making statement C false.

Suppose That Bolivia Is Labor Abundant, and the Production of Trinkets