In the Context of the Classical/Ricardo Model, Suppose That, in an Industry

question 15

Multiple Choice

In the context of the Classical/Ricardo model, suppose that, in an industry X, the Productivity of U.S. workers is three times the productivity of Chinese workers. At the same time, suppose that the wage rate paid to Chinese workers is 20% of the wage rate paid to U.S. workers. In this situation, the unit labor cost of producing good X would be __________ in China than in the United States and therefore, in this two-country Classical/Ricardo context, __________.

• A) lower; China would export good X to the United States
• B) lower; the United States would export good X to China
• C) higher; China would export good X to the United States
• D) higher; the United States would export good X to China

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Definitions:

Chadwick Sign

A bluish discoloration of the cervix, vagina, and labia resulting from increased blood flow, usually an early sign of pregnancy.

Cervix

The lower part of the uterus that connects to the vagina and dilates during childbirth to allow for the passage of a baby.

Human Papilloma Virus

A group of viruses that can cause warts on the skin or mucous membranes and may lead to cancers such as cervical cancer.

Genital Warts

A sexually transmitted infection characterized by small, fleshy growths on the genital or anal area, caused by human papillomavirus (HPV).