If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain,then the United States will:
A)export both airplanes and automobiles to Britain.
B)import both airplanes and automobiles from Britain.
C)export airplanes to Britain and import automobiles from Britain.
D)import airplanes from Britain and export automobiles to Britain.

Question

Quizplus · Accepted Answer

The United States will specialize in the production of automobiles because the opportunity cost of manufacturing them is lower than in Britain. As a result, the United States will produce more automobiles at a lower cost than Britain, making it more competitive in the international market. Conversely, Britain will specialize in the production of airplanes because the opportunity cost of manufacturing them is lower than in the United States. Therefore, Britain will produce more airplanes at a lower cost than the United States, making it more competitive in the international market. This will result in the United States exporting automobiles to Britain and importing airplanes from Britain.

If the Opportunity Cost of Manufacturing Automobiles Is Lower in the United