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Consider the following statement: "The United States can make certain toys with greater productive efficiency than can China. Yet we import those...

Consider the following statement: “The United States can make certain toys with greater productive efficiency than can China. Yet we import those toys from China.”

We import these toys from China because

the U.S. has a higher cost per unit of producing the toys.
the U.S. has an absolute advantage in producing toys, but China has a comparative advantage in producing toys.
China produces better toys.
China has an absolute advantage in producing toys, but the U.S. has a comparative advantage in producing toys.

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