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:

Categorical

Relating to or involving categories, especially as opposed to continuous measurement or gradations; often used in reference to classification systems.

Psychodynamic View

A perspective in psychology that emphasizes the influence of the unconscious mind on behavior, stemming from Freudian theory.

Obsessive-Compulsive

Relating to a mental disorder characterized by recurrent, unwanted thoughts (obsessions) and repetitive behaviors (compulsions).

Perfectionism

The tendency to set excessively high standards for oneself and striving for flawlessness, often at the expense of mental well-being.