Question

The furniture industry has become one of the fastest-growing sectors of China's economy. Furniture imports are flooding into the United States from China. This can be attributed to:

A) the quality of furniture is better than that made in Europe.
B) American tastes in décor have changed.
C) China's low labor rates translate into reasonable prices for consumers.
D) China can survive tough competition.
E) replacement parts are readily available from China.

Answer 1

Furniture imports from China to the U.S. are on the rise primarily due to China's low labor costs, which lead to more affordable consumer prices. Option c.

Step-by-step explanation:

The rapid growth of furniture imports flooding into the United States from China can be primarily attributed to (c) China's low labor rates which translate into reasonable prices for consumers. Due to its comparative advantage in manufacturing, China can produce goods at a lower cost. This advantage stems from China's large, educated workforce and a government with tight control over its economy, allowing for the production of goods at scale and affordable prices. Moreover, special economic zones (SEZs) have propelled the urban and economic growth in coastal cities, further enhancing China's manufacturing capabilities.