1. You are the president of a small island nation that has never engaged in trade with any other nation. You are considering the possibility of opening the economy to international trade. The chief economist of the island’s only labor union, to which every worker belongs, tells you that free trade will reduce the real purchasing power of labor, and you have no reason to doubt him. You are determined to remain in office and need the union’s support in order to do so. The union will never support a candidate whose policies adversely affect the welfare of its members. Does this mean you should keep the island closed to trade?