Question

Which is an argument against free trade?

Answer 1

The correct answer is C.

A justification for the establishment of import duties and other trade barriers is the need of protecting domestic products who cannot compete in prices with cheap imports from developing countries where, for example, labor market standards are less strict and they are able to pay lower wages to their employees.

Therefore, lower factor costs mean lower total production costs and the foreign industries can export their products to other countries at a much cheaper price than the one charged by domestic producers, attracting the majority of consumers and gaining a major portion of the market share.

Answer 2

C is the correct answer.