Question

Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles, _________

Answer 1

Answer:

The answer is- Other countries have a comparative advantage over Vietnam and Vietnam will import textiles.

Explanation:

If the domestic price of textile without international trade is higher than the world price of textiles, it means that the prices of textile in the domestic or home country would be more expensive than the textiles that are purchased from other countries. There would be increased import of textile from foreign countries due to the increased demand for textile at a better price. The other countries will then have a comparative advantage over Vietnam and Vietnam will import textiles.