If China is capable of producing either teddy bears or toy trains or some combination of the two, then
A)China should specialize in the product in which it has an absolute advantage.
B)it would be impossible for China to have an absolute advantage over another country in both products.
C)it would be difficult for China to benefit from trade with another country if China is efficient in the production of both goods.
D)China's opportunity cost of teddy bears is the inverse of its opportunity cost of toy trains.

Question

Quizplus · Accepted Answer

The opportunity cost of producing one good is the amount of another good that must be given up to produce it. In this context, if China uses its resources to produce teddy bears, those resources cannot be used to produce toy trains, and vice versa. Therefore, the opportunity cost of producing teddy bears in terms of toy trains is the inverse of the opportunity cost of producing toy trains in terms of teddy bears. This is a fundamental principle of economics related to trade-offs and opportunity costs.

If China Is Capable of Producing Either Teddy Bears or Toy