If labor-intensive textile products could be produced more cheaply in low-wage countries than in the United States, the United States would gain if it
A) levied a tariff on the goods produced by the cheap foreign labor.
B) subsidized the domestic textile industry so it could compete in international markets.
C) used its resources to produce other items while importing textiles from foreigners.
D) levied a tax on the domestic textile products to penalize the industry for inefficiency.

Question

Quizplus · Accepted Answer

The United States would gain by specializing in the production of goods where it has a comparative advantage and importing textiles, which can be produced more cheaply elsewhere. This allows for more efficient allocation of resources and maximizes economic welfare.

If Labor-Intensive Textile Products Could Be Produced More Cheaply in Low-Wage