The Main Explanation for Why the Cheap Foreign Labor Argument

question 113

Multiple Choice

The main explanation for why the cheap foreign labor argument is a poor reason for restricting international trade is that:

• A) workers who get paid less tend to have lower productivity than those who get paid more.
• B) all firms and workers gain when there are no restrictions on international trade.
• C) infant industries such as steel and automobiles need to be protected.
• D) specialization and free trade usually raise the prices of all the traded goods, so that the workers can get paid more.

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Definitions:

Social Loafing

The phenomenon where individuals exert less effort when working in a group than when working individually.

Conformity

The adjustment of one's behavior or beliefs to match those of others, often due to real or imagined group pressure.

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Decorative badges or pins symbolizing membership in a particular sorority, often worn as a sign of affiliation and pride.

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Describes the phenomenon that an individual's performance improves when performing tasks in the presence of others as opposed to alone.