In a column in the Wall Street Journal, the business historian John Steele Gordon notes that the

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In a column in the Wall Street Journal, the business historian John Steele Gordon notes that “the U.S. sells Bangladesh movies and buys its T-shirts. Both nations are better off. Both are richer because of the trade.”

a. For this trade to happen, what must be true of the opportunity cost of making movies in the United States compared with the opportunity cost of making them in Bangladesh? 

b. Can we be certain that T-shirts can be manufactured using fewer hours of work per T-shirt in Bangladesh than in the United States? Briefly explain.  

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Economics

ISBN: 9780135957554

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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