Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs.An economist would argue that
A)foreign competition may cause unemployment in import-competing industries,but the effect is temporary because other industries,especially exporting industries,will be expanding.
B)foreign competition may cause unemployment in import-competing industries,but the increase in consumer surplus due to free trade is more valuable than the lost jobs.
C)the critics are correct,so countries must protect their industries with tariffs or quotas.
D)foreign competition may cause unemployment in import-competing industries,but the increase in the variety of goods consumers can choose from is more valuable than the lost jobs.

Question

Quizplus · Accepted Answer

While foreign competition may lead to unemployment in import-competing industries, other industries, especially export-oriented ones, can expand due to greater consumer surplus created by free trade. This can help to counter the temporary job losses and benefit the overall economy in the long run. Protectionist measures like tariffs or quotas can have negative consequences and reduce consumer welfare.

Critics of Free Trade Sometimes Argue That Allowing Imports from Foreign