Question

China is relatively labor-abundant compared with European Union member nations. Therefore, China has a comparative advantage in _____ compared with European Union member nations.

A all goods

B goods that are labor-intensive in production

C goods that are land-intensive in production


D goods that are capital-intensive in production

Answer 1

Answer:

B goods that are labor-intensive in production

Explanation:

Answer 2

China has a relative advantage in goods that are labor-intensive in production compared with European Union member nations.

The labor-intensive advantage in producing goods implies that China has a better ability to produce goods that requires a large number of laborers due to the easy availability of laborers at low cost.

Thus, European Union nations would incur more cost in producing labor-intensive products due to high labor costs because of less availability of labors than capital as the nations have better accessibility of capital.

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