Many service-sector jobs in the United States have moved to other countries where these jobs are done at a fraction of the cost. The outsourcing of jobs overseas is heavily debated by politicians, policy makers, and economists in the United States
Based on your understanding of trade and the benefits and losses from trade, how do you think outsourcing affects social surplus in the domestic economy?
Companies that outsource work to other countries will see a fall in their input costs. The prices of these goods and services will fall, increasing consumer surplus in the market. On the other hand, some workers who are employed in the service sector in the domestic economy will lose their jobs. Outsourcing will benefit the economy as a whole if the gain in consumer surplus outweighs the possible losses in the job market (assuming that the workers do not find other comparable jobs). Outsourcing is hotly debated for this reason: it affects different groups in the economy in different ways.
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Average costs curves later rise
a. Due to declining average fixed costs b. Due to rising average fixed costs c. Due to declining marginal costs d. Due to rising marginal costs
Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force
a. Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. b. Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. c. The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. d. The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise.