8. The fact that trade policy often imposes harm on large numbers of people, and benefits only afew may be explained byA) the lack of political involvement of the public.B) the power of advertisement.C) the problem of collective action.D) the basic impossibility of the democratic system to reach a fair solution.E) a cycle of political corruption.
Question
- The fact that trade policy often imposes harm on large numbers of people, and benefits only afew may be explained byA) the lack of political involvement of the public.B) the power of advertisement.C) the problem of collective action.D) the basic impossibility of the democratic system to reach a fair solution.E) a cycle of political corruption.
Solution
The fact that trade policy often imposes harm on large numbers of people, and benefits only a few can be explained by the problem of collective action. This is because collective action problems occur when the actions that are in the individual interest of each member of a group are not in the collective interest of the group as a whole. In the context of trade policy, this can mean that policies that benefit a few powerful or well-organized groups (like certain industries or corporations) are implemented, even if they are harmful to the larger population. This is because these groups have a strong incentive to lobby for policies that benefit them, while the larger population, each of whom is only slightly harmed by the policy, has less incentive to lobby against it. So, the correct answer is C) the problem of collective action.
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