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Ec 410 - Assignment Example

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a). Homes outsourced production activities will be higher on the value chain for a given product. Therefore, Homes will outsource production activities that are skilled-labor intensive because it will be cheaper than in the domestic market.
b). Increasing tariffs level may…
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Assignment ec 410
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Ec 410

Download file to see previous pages... At 50% no activities that are cheaper to produce in the U.S as compared to Mexico.
1).The main difference between outsourcing in manufacturing versus business service is that in manufacturing the company may be given the mandate to manufacture goods locally using the patent of the parent company. On the other hand, the parent company may enter into a contract with another firm whereby, that firm is given mandate to offer services either locally or in the foreign market (Avadhanam, para.4)
2). Skill premium is where the wages earned by both skilled and skilled labors who works in the same field increase relatively to each other. The skilled premium in the U.S has widened wage gap between skilled and unskilled labor for the past 30years (Kannan, p.115).
3).The effects of outsourcing on workers’ wages include; it reduces the wages earned by workers, skilled workers may obtain more wage benefits as compared to the unskilled. Finally, it causes suffering to workers who worked at outsourcing firms.
5).It is true that U.S skilled workers fear the security of their jobs due to possibility of outsourcing. This because a firm may find cheaper to outsource labor rather than utilize local labor (Kannan, p.136)
1). The three factors that make Kenya an attractive site for Business Process Outsourcing include: availability of the 3 fiber optic cables, emergence of 4 undersea cables and availably of highly skilled labor force (The Economist, ...Download file to see next pagesRead More
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