Figure 1. An Example of China-U.S. Trade Possibilities
-Considering Figure 1, which of the following would be true?
A) China has more of both labor and capital than the U.S.
B) The U.S. has more of both labor and capital than China.
C) The U.S. is relatively capital abundant and China is relatively labor abundant.
D) The U.S. is relatively labor abundant and China is relatively capital abundant.

Question

Figure 1. An Example of China-U.S. Trade Possibilities 
-Considering Figure 1, which of the following would be true?
A) China has more of both labor and capital than the U.S. 
B) The U.S. has more of both labor and capital than China. 
C) The U.S. is relatively capital abundant and China is relatively labor abundant. 
D) The U.S. is relatively labor abundant and China is relatively capital abundant.

Quizplus · Accepted Answer

Given the information, the correct interpretation is that the U.S. is relatively capital abundant, meaning it has more capital in relation to labor compared to China. Conversely, China is relatively labor abundant, indicating it has more labor in relation to capital compared to the U.S. This is a common economic characterization of these two countries, reflecting their respective resource endowments and economic structures.

Figure 1 an Example of China-U