Suppose the United States Is More Productive Than China at Producing

question 7

Multiple Choice

Suppose the United States is more productive than China at producing both T-shirts and cell phones. The theory of comparative advantage suggests that consumption in both countries will:

• A) increase if the United States produces both goods.
• B) increase if each country produces the good for which it has the lowest opportunity cost.
• C) not change if China produces either T-shirts or cell phones.
• D) remain the same since nothing can be done to increase production in the two countries.

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Definitions:

CFCs

Chlorofluorocarbons, a group of chemical compounds used in some aerosols, refrigerants, and foam blowing agents that can deplete the ozone layer.

Coolants

Substances used to reduce or maintain the temperature of systems or components, often in mechanical and electrical devices.

Sterilants

Chemical or physical agents used to destroy or eliminate all forms of microbial life, including spores.

Biodegradable

Capable of being decomposed by bacteria or other living organisms, thus avoiding pollution.