Vietnam has an advantage in producing clothing because of lower labor costs. What kind of advantage is this?

Question

BlackTom AI · Accepted Answer

The question asks about the type of economic advantage Vietnam has due to lower labor costs in clothing production.
Option 1: economic advantage. This is a very general term and does not specify the source of the advantage. While lower labor costs can contribute to an economic advantage, the more precise economic concept here is how the country compares to others in production relative to opportunity costs, not just overall wealth or advantage.
Option 2: comparative advantage. This is the correct framing. Comparative advantage occurs when a country can produce a good at a lower opportunity cost than its trading partners. Lower labor costs give Vietnam a lower cost of producing clothing relative to other goods or to other countries, making clothing production comparatively more efficient and advantageous for exporting, assuming relative costs and trade-offs are considered.
Option 3: competitive advantage. This term is often used in business strategy to describe a firm's or industry's ability to outperform rivals in a market, usually through differentiation, branding, or efficiency. While relevant to firms, it is not the standard economic term describing why a country specializes in a production activity due to relative costs.
Option 4: absolute advantage. This refers to a country’s ability to produce more of a good with the same quantity of resources, or using fewer resources overall. Lower labor costs can contribute to efficiency but do not by themselves guarantee an absolute advantage unless Vietnam could produce clothing with fewer resources per unit than any other country for all inputs. In international trade theory, clothing production is typically cited as a case of comparative but not necessarily absolute advantage, since other factors like capital, technology, and trade-offs influence relative productivity.
In summary, the scenario illustrates that Vietnam has a lower opportunity cost in clothing production due to its labor efficiency, which aligns with the concept of comparative advantage rather than the broader or different notions of economic, competitive, or absolute advantages.

2025SU BSN 100 01 GRADED Quiz: Chapter03

Vietnam has an advantage in producing clothing because of lower labor costs. What kind of advantage is this?

查看解析

登录即可查看完整答案

类似问题

According to the data, if Mr. X and Ms. Y have the opportunity to trade, which of the following will be mutually beneficial?

The table given below shows how many smartphones or cars can be produced in China and Japan. Country Cars Smartphones China 30 40 Japan 30 20 To achieve gains from specialization and trade

The following table shows the output per week of two people, Alice and Bob. They can either devote their time to making hats or making umbrellas. Which of the following statements is true?

What assumption in Ricardo’s theory of comparative advantage makes it less applicable to modern global trade dynamics?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单