In order to produce PCs, 5 main activities are required: R&D, component production, assembly, marketing & sale, post-sale maintenance. Because of recent improvements in transportation and business environment in the "developing country", the parent company (located in the "developed country") decided to move abroad one extra activity, in addition to the existing outsourced activities.

4.1. Illustrate the value chain of the PCs by ranking the activities based on the required labor skills. Briefly explain.

4.2. What happens with the relative wage of the unskilled labor in both countries after that additional activity is offshored? Briefly explain.

4.3. What happens with the relative wage of the skilled labor in both countries after that additional activity is offshored?