Question

When a country trades according to principles of comparative ​advantage,

A. some workers will be hurt due to​ dislocation, though their losses could be offset if the gains from trade were shared.
B. all workers will gain.
C. all workers will lose due to foreign competition.
D. some workers will be hurt due to dislocation. Their loses are so large that it is impossible to offset these losses through the sharing of the gains from trade.

Answer 1

When a country trades according to the principles of comparative advantage, some workers may be hurt due to job losses and wage declines. However, if the gains from trade are shared, these losses can potentially be offset.

Step-by-step explanation:

The correct answer is A: Some workers will be hurt due to dislocation, though their losses could be offset if the gains from trade were shared.

When a country trades according to the principles of comparative advantage, it means that each country specializes in producing goods or services in which they have a lower opportunity cost than other countries. This allows countries to produce more efficiently and benefit from trading their surplus with each other.

However, not all workers will benefit from trade. Workers in industries that face competition from imports may experience job losses and wage declines. These workers may be hurt due to dislocation as their skills become less valuable in the global market. Nevertheless, the gains from trade can potentially offset these losses if they are shared equitably with the affected workers.