Which of the Following Is a Disadvantage of Local Requirement

question 12

Multiple Choice

Which of the following is a disadvantage of local requirement laws to foreign companies?

• A) They do not foster local business activity and increase regional and national unemployment.
• B) They make it necessary for the government to resort to expropriation and confiscation.
• C) The companies are forced to bring in raw material and workers from their own countries.
• D) Companies required to hire local personnel might be forced to take on inadequately trained workers.

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Definitions:

Efficient Outcome

An allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Marginal Cost

The cost associated with producing one additional unit of output, focusing on how total production costs change with production volume adjustments.

Carbon Tax

A financial charge imposed on greenhouse gas emissions, aimed at reducing carbon dioxide emissions and combating climate change.