What makes a country like Bangladesh better suited to produce T-shirts than the U.S.?
Answer (1)
Bangladesh has a lower opportunity cost. Most of its youth have fewer job options, so using labor for T-shirt production doesn’t sacrifice high-skill workers. In the U.S., making T-shirts takes away workers who could be engineers, doctors, or scientists. That’s why it’s more efficient for Bangladesh to make T-shirts, and the U.S. to focus on high-tech goods. This principle of comparative advantage helps both countries trade and benefit.
