If the opportunity cost of manufacturing automobiles is higher in the United States than in Britain and the opportunity cost of manufacturing airplanes is lower 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

According to the principle of comparative advantage, countries will export goods for which they have a lower opportunity cost and import goods for which they have a higher opportunity cost. Since the U.S. has a lower opportunity cost for airplanes, it will export them to Britain. Conversely, since the U.S. has a higher opportunity cost for automobiles, it will import them from Britain.

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