Question

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is: ______________.

a) lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production.
b) the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.
c) the same for both the United States and Bangladesh, therefore no comparative advantage exists.
d) higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.

Answer 1

Answer:

D )

Explanation:

Opportunity cost is higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.

       American Worker            Bangladesh Worker      

     50       pairs of gloves              100   pairs of gloves

   300       radishes                     200   radishes

   

   0.17   gloves/radishes           0.50   gloves/radishes

 6.00  radishes/gloves           2.00    radishes/gloves

   

                                            6.00 > 2.00