What Is the Dumping Argument for Protection from International Trade

question 31

Multiple Choice

What is the dumping argument for protection from international trade?

• A) Foreigners selling products in the economy limit the nation's diversity and stability.
• B) Foreign producers selling below cost to drive domestic firms bankrupt must be stopped.
• C) Any firm necessary in wartime must be protected.
• D) Domestic jobs must be protected from competition from low-paid foreign workers.
• E) Domestic firms must be protected until they gain a comparative advantage.

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Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.

Fixed Costs

Costs that do not change with the level of production output, such as rent, salaries, and insurance.

Variable Selling

Costs that change in proportion to the volume of goods or services sold.

Administrative Expense

Costs related to the general operation of a company that are not directly tied to a specific department or product, like salaries of executive officers and support staff.