Smith Argues That American Producers Cannot Compete with Foreign Producers

question 65

Multiple Choice

Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Smith is

• A)advancing the foreign export subsidies argument for protectionism.
• B)making the mistake of believing that high wages mean high costs.
• C)advancing the antidumping argument for protectionism.
• D)making the mistake of believing that productivity is higher in foreign countries than in the United States.

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Definitions:

Club Good

A type of good that is excludable and non-rivalrous, meaning access can be limited by a fee or membership but one person's use does not significantly diminish availability to others.

National Public Radio

A non-profit media organization that serves as a national syndicator to a network of public radio stations in the United States.

Allocation of Resources

The process by which resources are distributed for the production of goods and services within an economy.

Government Intervention

Regulatory actions taken by a government in order to affect decisions made by individuals, groups, or organizations within its economic systems.