Question

A very poor country like Bangladesh can have comparative advantage in clothing despite being less productive in clothing than other countries such as China. Why? A. Lower labor costs and abundant workforce in Bangladesh.

B. Advanced technology and machinery in Bangladesh.
C. Favorable climate for clothing production in Bangladesh.
D. Higher production efficiency in Bangladesh compared to China.

Answer 1

Bangladesh has a comparative advantage in clothing due to lower labor costs and an abundant workforce.

Step-by-step explanation:

In the case of Bangladesh, a very poor country, it can have a comparative advantage in clothing despite being less productive than other countries like China. This is primarily due to lower labor costs and an abundant workforce in Bangladesh, which makes it more cost-effective for clothing production.

Bangladesh also benefits from the availability of cheap labor, which attracts sweatshops to manufacture clothing for export to global markets. It is important to note that comparative advantage is based on opportunity costs, where a country gives up relatively less to produce a certain good compared to another country.