2.5 Consider a bicycle producer that initially employs 200 production workers and 10 customer-service workers. When the

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2.5 Consider a bicycle producer that initially employs 200 production workers and 10 customer-service workers. When the firm outsources its customer- service operation to India, the 10 customer-service workers lose their jobs.

a. Explain why the net effect from outsourcing could be a loss of fewer than 10 jobs in the firm.

b. Under what circumstances will there be a net gain. in jobs in the firm?

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Economics: Principles, Applications And Tools

ISBN: 9781915294227

7th Edition

Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez

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