We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that China had a comparative advantage in silk. no comparative advantage could exist because the technology was not diffused. China exported silk for political reasons even though it had no comparative advantage. China had an absolute advantage, but not a comparative advantage in silk. China was unable to profit by exporting silk because it was unknown in the rest of the world.
We know that in antiquity, China exported silk because no one in any other country knew how to produce this product. From this information we know that China had a comparative advantage in silk. no comparative advantage could exist because the technology was not diffused. China exported silk for political reasons even though it had no comparative advantage. China had an absolute advantage, but not a comparative advantage in silk. China was unable to profit by exporting silk because it was unknown in the rest of the world.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...
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