Because the gain from a tariff is large, producers have a strong incentive to incur the expense of lobbying for a tariff and against free trade. On the other hand, because each consumer’s loss is small, consumers have little incentive to organize and incur the expense of lobbying for free trade.

The gain from free trade for any one person is too small for that person to spend much time or money on a political organization to lobby for free trade. The loss from free trade will be seen as being so great by those

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bearing that loss that they will find it profitable to join a political organization to prevent free trade. Each group weighs benefits against costs and chooses the best action for themselves, but the anti-free-trade group will undertake more political lobbying than will the pro-free-trade group.

EYE on YOUR LIFE International Trade MyEconLab Critical Thinking Exercise International trade plays an extraordinarily large role in your life in three broad ways. It affects you as a Consumer Producer Voter