According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored from Japan to Mexico, the skilled-unskilled wage ratio will: (a)Decrease in both countries. (b)Increase in Japan but decrease in Mexico. (c)Decrease in Japan but in increase in Mexico. (d)Increase in both countries. Explain your answer clearly. Limit your explanation to 200 words.
According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored from Japan to Mexico, the skilled-unskilled wage ratio will: (a)Decrease in both countries. (b)Increase in Japan but decrease in Mexico. (c)Decrease in Japan but in increase in Mexico. (d)Increase in both countries. Explain your answer clearly. Limit your explanation to 200 words.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 4E
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According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored from Japan to Mexico, the skilled-unskilled wage ratio will:
(a)Decrease in both countries. (b)Increase in Japan but decrease in Mexico. (c)Decrease in Japan but in increase in Mexico. (d)Increase in both countries. Explain your answer clearly. Limit your explanation to 200 words.
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