Which economic theory would most likely lead someone to oppose taxing imports?

• A. Comparative advantage
• B. Mercantilism
• C. Protectionism
• D. Monopoly theory

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of Comparative Advantage, which states that countries benefit from specializing in producing goods for which they have a lower opportunity cost and then trading with others. This theory supports free trade and opposes barriers like import taxes.
2. Step 2: Recognize that Mercantilism is an older economic theory that favors accumulating wealth through trade surpluses and often supports restricting imports to protect domestic industries.
3. Step 3: Note that Protectionism involves policies such as tariffs and import taxes designed to shield domestic industries from foreign competition, so it supports taxing imports rather than opposing it.
4. Step 4: Understand that Monopoly Theory focuses on market power and the behavior of monopolists, which is less directly related to trade policies like import taxes.
5. Step 5: Conclude that since Comparative Advantage promotes free trade and efficiency, it is the economic theory most likely to lead someone to oppose taxing imports.