Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Using the concepts of advantage and trade,we can say that:
A)the opportunity cost of one pair of gloves is lower for the United States than Bangladesh,therefore the United States has a comparative advantage in glove production.
B)the opportunity cost of one pair of gloves is higher for the United States than Bangladesh,therefore the United States has a comparative advantage in radish production.
C)the opportunity cost of one pair of gloves is the same for both the United States and Bangladesh,therefore no comparative advantage exists.
D)the opportunity cost of one pair of gloves is the same for both the United States and Bangladesh,therefore they both have the comparative advantage in glove production.

Question

Quizplus · Accepted Answer

The opportunity cost of one pair of gloves in the United States is 6 radishes (300 radishes/50 gloves), while in Bangladesh it is 2 radishes (200 radishes/100 gloves). Therefore, the opportunity cost is higher in the United States, giving Bangladesh a comparative advantage in glove production, and the United States a comparative advantage in radish production.

Suppose an American Worker Can Make 50 Pairs of Gloves