Economics question please help?

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miller20817

New member
There is no exact answer to this question, but here is one way in which this is possible. Because the customers of this firm are now paying 20 percent less on their bills due to the outsourcing, the customers have more income. Thus if they use that income to buy other goods and services from a domestic producer (you are assuming that they are not buyiong 100 percent from a non domestic source) then that doemstic producer will have to increase production to respond to the increased demand for its goods and services. Thus, the domestic company will hire more employees, thus creating American jobs and making the new loss of jobs less than 400. The main idea behind this question is that if savings are passed along to consumers they will spend at least some of that money for other goods and services. Hope this helps.
 
There is no exact answer to this question, but here is one way in which this is possible. Because the customers of this firm are now paying 20 percent less on their bills due to the outsourcing, the customers have more income. Thus if they use that income to buy other goods and services from a domestic producer (you are assuming that they are not buyiong 100 percent from a non domestic source) then that doemstic producer will have to increase production to respond to the increased demand for its goods and services. Thus, the domestic company will hire more employees, thus creating American jobs and making the new loss of jobs less than 400. The main idea behind this question is that if savings are passed along to consumers they will spend at least some of that money for other goods and services. Hope this helps.
 
Consider a firm that employs xxxx. Suppose the firm shifts its customer service activities to a call center in another country, and 400 customer-service workers lose their jobs. In addition, suppose the outsourcing reduces the firm's overall production cost by 20 perent, allowing the company to cut the price of its product by 20 percent. Explain why the net loss of jobs from the firm's outsourcing will be fewer than 400 jobs.
 
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