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Why Does Compensating Those Harmed by Trade Represent a "Pareto

Question 40

Multiple Choice

Why does compensating those harmed by trade represent a "Pareto improvement"?


A) Trade benefits the country as a whole sufficiently that the country can provide compensation,thus improving the outcome for those hurt by trade,while still coming out ahead overall.
B) Tying compensation to trade makes trade so costly that it will only occur when it is extremely beneficial to the country.
C) Generous compensation will draw additional workers from abroad,thus increasing the output of the protected industry.
D) Compensation improves the efficiency of workers,which can counteract the comparative disadvantage labor has in a developed economy.

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