Arguments for free trade are sometimes disregarded by politicians because ?
Correct answer: B. Maximizing consumer welfare may not be a chief priority
- A. Maximizing domestic efficiency is not considered imports
- B. Maximizing consumer welfare may not be a chief priority
- C. There exist sound economic reasons for keeping one's economy isolated from other economies
- D. Economists tend to favor high protected domestic markets
Explanation
Politicians may give greater weight to organized domestic producers and visible jobs than to the broader but less politically organized gains consumers receive from cheaper imports. Thus consumer welfare is not always their chief priority.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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