Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 9 - Part III - Application: International Trade - Problems and Applications - Page 190: 4

Answer

a) One possible argument is that jobs in our country are terminated from low-priced foreign competition in timber. With low-priced foreign timber in our country, there is less demand for timber that is more expensive than the foreign imports, thus eliminating timber jobs. b) The jobs argument makes some sense. Although workers in the affected industry would be immediately affected by foreign imports, over the long run, workers would find other jobs in other industries where the importing country has a comparative advantage.

Work Step by Step

a) Another possible argument is that foreign imports exported by those countries use different rules and regulations than we apply in our country. Thus, there is unfair competition in our country for timber. Thus, unfair competition in our country by foreign countries exporting timber, destroys our jobs. b) The national security act argument also makes some sense. Although other countries may be quick to designate certain industries as crucial to national security, there can be legitimate concerns about a country's national security and could place limits on how much of a good is imported.
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