Answer to Question #155749 in Microeconomics for Ayan Bhunia

Question

Suppose USA has a high average wage level and a high level of output per person, while China has a low average wage level and low level of output per person. Which Country can benefit from trade? 

Answer 1

China, a country with low wage level and low level of output will benefit from trade, because there is a greater opportunity niche in the market. This will attract investors both domestic and foreign thus increasing the level of wages to the workers and increased level of output to the country.