Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor and producing a shirt takes 4 hours of labor. What will these nations trade? a. China will export aircraft, and the United States will export shirts. b. China will export shirts, and the United States will export aircraft. c. Both nations will export shirts. d. There are no gains from trade in this situation.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
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Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
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Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt
takes 2 hours of labor. In China, producing an aircraft
takes 40,000 hours of labor and producing a shirt
takes 4 hours of labor. What will these nations trade?
a. China will export aircraft, and the United States
will export shirts.
b. China will export shirts, and the United States will
export aircraft.
c. Both nations will export shirts.
d. There are no gains from trade in this situation.

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