Because the United States has ________ advantage compared to China in producing airplanes,China can buy airplanes from the United States at a ________ opportunity cost than that at which China can produce them.
A) comparative; lower
B) comparative; higher
C) absolute; lower
D) absolute; higher
E) None of the above because China will produce airplanes and sell them to the United States.

Question

Quizplus · Accepted Answer

The blank refers to comparative advantage, which is the ability to produce a good or service at a lower opportunity cost than another country. Therefore, the correct answer is A because the United States has a comparative advantage in producing airplanes compared to China, resulting in China being able to buy airplanes from the United States at a lower opportunity cost than producing them domestically.

Because the United States Has ________ Advantage Compared to China