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4 April, 09:32

Tire production in the United States has been on the decline, in both absolute and relative terms. Imported tires are replacing most of the domestically manufactured tires in the market. Trade unions in the United States have claimed that over 7,000 jobs have been lost due to Chinese tire imports. You read a blog post that uses this example to say that this is exactly why countries should not engage in free trade: cheaper imports will flood the domestic market and unemployment in the country will increase. Do you think the blogger's conclusions are entirely correct? (Check all that apply) A. Yes, because the country loses jobs and workers are made worse off. B. No, because the efficiencies gained from exploiting comparative advantage generate more winners than losers. C. Yes, because the losers from free trade are likely to outnumber the winners, making the country worse off overall. D. No, because the winners from free trade could compensate the losers.

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  1. 4 April, 09:37
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    B. No, because the efficiencies gained from exploiting comparative advantage generate more winners than losers.

    Explanation:

    Everything has its all pros and cons. When international trade takes place, people in the economy are happy, because of wide variety and options given.

    Further the traders, manufacturers also tend to grow as due to competition they improve with the quality standards, designs, variations, etc:

    Competition forces to excel in any kind of job you do. And that only the best players and performers stay in the market.

    This is the advantage, of such international trades.
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