Question

If the united states and brazil engage in free​ trade, u.s.______ of shoes lose because​ ______.

a. ​consumers; producers get all the gains from the free trade
b. ​producers; the price of shoes falls and the quantity of shoes they sell decreases
c. producers and​ consumers; fewer shoes are available in the united states
d. ​consumers; the price rises and the quantity bought decreases

Answer 1

If the United States and Brazil engage in free​ trade, U.S. producers of shoes lose because​ the price of shoes falls and the quantity of shoes they sell decreases. Brazil is able to making shoes cheaper than the United States because of their access to materials and their labor wages. If the U.S. and Brazil engage in free trade, the companies within the U.S. would suffer because the shoes coming from Brazil would be cheaper than those produced within the United States. The price of shoes would fall in comparison to the cheaper shoes being imported and those manufactured in the U.S. would have a decrease in quantity sold.