We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that
A) China had a comparative advantage in silk.
B) China had an absolute advantage, but not a comparative advantage in silk.
C) no comparative advantage could exist because the technology was not diffused.
D) China exported silk for political reasons even though it had no comparative advantage.
E) China was unable to profit by exporting silk because it was unknown in the rest of the world.

Question

Quizplus · Accepted Answer

The fact that China was the sole producer of silk in antiquity suggests that it had a comparative advantage in the production of silk. A comparative advantage occurs when a country can produce a good at a lower opportunity cost than another country. In this case, China had a lower opportunity cost of producing silk than any other country, so it made sense for them to export it instead of producing other goods.

We Know That in Antiquity, China Exported Silk Because No