Suppose the marginal productivity of customer service representatives in a rich country is MP L = 17
Question:
Suppose the marginal productivity of customer service representatives in a rich country is MPL = 17 - .6L, where L = the number (in thousands) of workers. The marginal productivity of customer service representatives in a poorer country is MPL = 11 - .8L. Currently, there are 10,000 workers in the rich country who are employed as customer service representatives at a wage rate of $20 per hour. In the poor country, there are 5,000 workers who are employed as customer service representatives at a wage rate of $10 per hour.
A firm in the rich country is thinking about transferring 1,000 customer service jobs from the rich country to the poor one.
Do you think it should do so? Why or why not?
Step by Step Answer:
Modern Labor Economics Theory And Public Policy
ISBN: 9780132540643
11th Edition
Authors: Ronald Ehrenberg, Robert Smith