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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?

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thaovtp1407

Answer:

China should trade Aircraft to Shirt and American should trade shirt to Aircraft.

Step-by-step explanation:

We should make a comparison table between two country

                China America  

1 Aircraft  40000 100000

1 Shirt          4               2

It is clear that China's labor productivity in aircraft production is more outstanding than America and America's labor productivity in shỉrt production is better.

So China should trade Aircraft to Shirt and American should trade shirt to Aircraft.

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