Barriers to international trade tend to inhibit the efficient allocation of production across industries and thus allow inefficient industries to continue using labor and capital resources that could be used more productively in other sectors.

Question

Quizplus · Accepted Answer

Barriers to international trade, such as tariffs and quotas, can protect less efficient domestic industries from foreign competition. This protection allows these industries to continue operating, potentially using resources (labor and capital) that could be more productively employed in more competitive sectors, leading to an inefficient allocation of resources.

Barriers to International Trade Tend to Inhibit the Efficient Allocation