Assume That China Has a Comparative Advantage in Producing Corn

question 236

Multiple Choice

Assume that China has a comparative advantage in producing corn and exports corn to Japan. We can conclude that

• A) China also has an absolute advantage in producing corn relative to Japan.
• B) China has a lower opportunity cost of producing corn relative to Japan.
• C) Japan has an absolute disadvantage in producing corn relative to China.
• D) Labor costs are higher for corn producers in Japan than in China.

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Definitions:

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