Workers in high-productivity countries fear trade because theythink they cannot compete with workers in low-productivitycountries. Workers in low-productivity countries fear tradebecause they think they cannot compete with workers in high-productivity countries. Which set of fears is justified?

Question

Quizplus · Accepted Answer

Trade typically benefits both high-productivity and low-productivity countries through the principle of comparative advantage, where each country specializes in producing goods for which it has a lower opportunity cost. This specialization increases overall efficiency and benefits consumers in both countries with lower prices and more variety.

Workers in High-Productivity Countries Fear Trade Because Theythink They Cannot