The table given below shows the absolute tax amounts under five different tax policies for respective income levels.Table 19.2

-"Most textiles worn by American consumers are produced in Asian and South American countries where the opportunity costs of production are lower." This observation refers to the:

Question

The table given below shows the absolute tax amounts under five different tax policies for respective income levels.Table 19.2
 
-"Most textiles worn by American consumers are produced in Asian and South American countries where the opportunity costs of production are lower." This observation refers to the:

Quizplus · Accepted Answer

The observation refers to the principle of comparative advantage, which states that countries should specialize in producing goods and services for which they have the lowest opportunity cost of production. In this case, the Asian and South American countries mentioned have a lower opportunity cost of producing textiles, thus it is beneficial for them to specialize in this area and export to other countries, such as the United States, where the opportunity cost of production is higher.

The Table Given Below Shows the Absolute Tax Amounts Under