A Major Difficulty with the Argument That Trade Barriers Are

question 274

Multiple Choice

A major difficulty with the argument that trade barriers are necessary because foreign workers are paid low wages is that

• A)labor costs and product prices are not related.
• B)there is no discernible relationship between wage rates and labor productivity.
• C)wage rates and labor productivity are directly related.
• D)wage rates and labor productivity are inversely related.

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Definitions:

MC = P

A condition in economic theory where Marginal Cost (MC) equals Price (P), indicating optimal production levels where no additional units should be produced.

Profit

The financial gain obtained when the total revenues generated exceed the total costs incurred by a business.

Marginal Cost

The growth in total expenses incurred from the production of one more unit.

Output

The total amount of goods or services produced by a firm or country.