In Question #11 above, suppose that one-half day of labor must be used to transport a Good internationally, no matter which good is considered and which country is doing the Exporting. With this addition of transportation costs, England will export good(s) __________ and will import good(s) __________.
A) A; B, C, D, and E
B) A and D; B, C, and E
C) A; B, C, and E
D) A; B and C

Question

Quizplus · Accepted Answer

With the added transportation cost, England will only export Good A since it has the comparative advantage in producing it. However, it will also import Goods B, C, and E due to their lower opportunity cost in their respective countries. Good D will not be imported since England has a comparative advantage in producing it even with the added transportation cost.

In Question #11 Above, Suppose That One-Half Day of Labor