It is sometimes argued in editorials or TV commentaries that the modern wave of outsourcing, especially outsourcing of services to India, defies the logic of the Ricardian model. Let's examine if this is actually the case. The following table presents information on labor productivity in computer component production and call center services in Canada and India. Assume that Canada has an absolute advantage in both. To complete the following table, choose the number of calls that would be most plausible and consistent with the reality of outsourcing services to India, and indicate the good in which each country has a comparative advantage. Production per Employee Computer Components Call Center Services Country (Units per hour) (Phone calls per hour) Comparative Advantage Canada 18 India 3 Call center services Does the observed pattern of outsourcing from Canada to India, where Computer component production , support ne Togie or the Ricararan model? O Yes No
It is sometimes argued in editorials or TV commentaries that the modern wave of outsourcing, especially outsourcing of services to India, defies the logic of the Ricardian model. Let's examine if this is actually the case. The following table presents information on labor productivity in computer component production and call center services in Canada and India. Assume that Canada has an absolute advantage in both. To complete the following table, choose the number of calls that would be most plausible and consistent with the reality of outsourcing services to India, and indicate the good in which each country has a comparative advantage. Production per Employee Computer Components Call Center Services Country (Units per hour) (Phone calls per hour) Comparative Advantage Canada 18 India 3 Call center services Does the observed pattern of outsourcing from Canada to India, where Computer component production , support ne Togie or the Ricararan model? O Yes No
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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