Future Business Leader Achievments (FBLA) Economics Practice Exam

The argument that import restrictions are necessary to protect American workers from cheap foreign labor incorrectly overlooks the issue of

1. the size of tariffs and other barriers

2. comparative advantage

3. the degree of specialization in different countries

4. differences in worker productivity

The correct answer is: differences in worker productivity

The argument that import restrictions are necessary to protect American workers from cheap foreign labor overlooks the critical issue of differences in worker productivity. This concept is central to economic discussions about trade and labor. When analyzing why certain countries can produce goods at a lower cost, it often comes down to productivity levels. In many cases, foreign workers may appear to be paid less than American workers, but they may also be more efficient or produce higher output relative to their wage. This disparity means that import restrictions may not necessarily benefit American workers as intended. Instead, they could lead to higher prices for consumers and reduced productivity overall. Moreover, importing goods at a lower cost can allow consumers access to more affordable products, thereby enhancing overall economic welfare. By neglecting worker productivity, the argument for import restrictions fails to consider how a dynamic global market operates and the potential benefits of allowing trade to proceed freely. Such oversight can lead to protectionist policies that harm the economy rather than help it.