Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.On the other hand,a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day.Using the concepts of advantage and trade,we can say that the opportunity cost of one pair of gloves is:
A) lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production.
B) higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.
C) the same for both the United States and Bangladesh, therefore no comparative advantage exists.
D) 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 is 6 radishes for the U.S. and 2 radishes for Bangladesh. Therefore, the U.S. has a higher opportunity cost in glove production, indicating a comparative advantage in radish production.

Suppose an American Worker Can Make 50 Pairs of Gloves