Why Are the Losers from Free International Trade Not Fully

question 12

Multiple Choice

Why are the losers from free international trade not fully compensated for their losses?

• A) The amount of compensation needed would bankrupt the government.
• B) The people who claim to lose are also the same ones who benefit.
• C) Identifying all losers and the size of their losses is extremely difficult.
• D) No one actually loses from international trade.
• E) The losers are foreigners.

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Definitions:

Marginal Costs

The boost in cost necessitated by the output of one more unit of a product or service.

Demand for Wine

The desire or need by consumers to purchase wine, which varies depending on factors like price, income levels, and personal preferences.

Reaction Function

A mathematical representation in economics that indicates how one player's action responds to the actions of another in a strategic setting.

Marginal Cost

The amount spent on the production of one more unit of a product or service.