The production of linen requires twice as much land and labor as the production of an equivalent amount of cotton. Nevertheless, linen is a staple
The production of linen requires twice as much land and labor as the production of an equivalent amount of cotton. Nevertheless, linen is a staple material utilized in designer clothing, such as women's blazers and dresses with prices exceeding $2,000, men's trench coats that sell for more than $1,500, and wedding gowns priced above $5,500.
Two-thirds of the world's linen is derived from a fiber called flax that is harvested within a narrow belt of farmland stretching from northern France into the Netherlands. The European coastal climate provides alternating sunshine and rain that contribute to development of a fungus that grows on the flax stems. The fungus breaks down the stems so that the linen fibers can be more readily separated from the plants. Thus, farmers residing this area are able to produce flax at a lower opportunity cost, in terms of forgone production of other goods, than almost anywhere else on the planet. This fact explains why this region of Europe has a comparative advantage in growing flax and specializes in the production of linen.
For Critical Thinking Why do you think that linen production generates gains from trade for European producers of flax and linen, even though cotton-based fabrics can be produced at lower absolute cost in many other parts of the world?
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Principles of Accounting
Authors: Belverd Needles, Marian Powers, Susan Crosson
10th edition
618736611, 978-1111809508, 111180950X, 978-0618736614
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