The Main Explanation for Why the Cheap Foreign-Labour Argument Is

question 13

Multiple Choice

The main explanation for why the cheap foreign-labour 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) specialisation 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:

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) divided by the number of units produced.

Unit Product Cost

It represents the total cost to produce one unit of product, including direct materials, direct labor, and manufacturing overhead.

Variable Costing

An accounting method that includes only variable production costs (material, labor, and overhead) in product costs, with fixed overhead expenses treated as period costs.

Common Fixed Expenses

Fixed costs that are not tied to any specific product or segment and are incurred by the business as a whole.