Suppose it takes a Chinese worker 2 hours to produce a ceramic pot,and 20 hours to produce a tablecloth.Suppose,also,that it takes an American worker 2 hours to produce a ceramic pot and 10 hours to produce a tablecloth.It will be worthwhile for China to produce extra pots and export them to the United States in return for imported U.S.tablecloths.

Question

Quizplus · Accepted Answer

China has a comparative advantage in producing ceramic pots as it takes them relatively lesser time than an American worker. On the other hand, the United States has a comparative advantage in producing tablecloths as it takes them lesser time than a Chinese worker. Therefore, it would be beneficial for China to focus on producing more ceramic pots and export them to the United States in exchange for U.S. tablecloths.

Suppose It Takes a Chinese Worker 2 Hours to Produce