China Has Developed a Comparative Advantage in the Production of Children's

question 37

Multiple Choice

China has developed a comparative advantage in the production of children's toys.The source of this comparative advantage is

• A)superior process technology.
• B)a large supply of unskilled workers and relatively little capital.
• C)investment in capital used to produce toys.
• D)a large supply of natural resources.

---

Definitions:

Price Falls

A decrease in the market price of a good or service, which can affect consumer demand, producer supply, and overall market equilibrium.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Perfectly Inelastic

Refers to a scenario in which the amount demanded or supplied shows no reaction whatsoever to changes in price.