China, Which Is Labor-Abundant, Has a Comparative Advantage in Clothing

question 108

Multiple Choice

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor-intensive. Which of the following models explains this pattern of comparative advantage?

• A)the Ricardian model
• B)a model of increasing returns
• C)the Heckscher-Ohlin model
• D)a model of autarky

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Definitions:

Price Of Ethanol

The cost at which ethanol, a type of alcohol used as fuel, is sold in the market.

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that suppliers are willing to produce and sell, typically upward sloping.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing the additional benefit or surplus enjoyed by producers due to market conditions.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the economic benefit to consumers.