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Suppose a U.S. computer company outsources its technical support services lo Ind

ID: 1226257 • Letter: S

Question

Suppose a U.S. computer company outsources its technical support services lo India. this will cause the demand for labor in the United States lo increase, increasing U S wage rates, and the demand tor labor in India to tall, decreasing Indian wage rates the demand for labor in the United States to fall. lowering U S wage rates, and the demand for labor in India to fall. decreasing Indian wage rates the demand for labor in the United States to fall, lowering U S wage rates. and the demand for labor m India to increase, increasing Indian wage rates. the demand for labor in labor United States to increase, lowering U.S. wag.) rates, and the demand for labor in India to fall, increasing Indian wage rates A monopolist engages in price discrimination by charging the same price to all consumers by charging a higher price when marginal cost is lower by charging a lower price to consumers whose demand is more elastic by charging a higher price to consumers whose demand is more elastic. John has just tried on the most comfortable pair of pants that he has ever known The pants are a(n) information good. experience good. logo good. credence good.

Explanation / Answer

Suppose a U.S. computer company outsources its technical-support services to India. This will cause the demand for labor in the United States to fall, lowering U.S. wage rates and the demandfor labor in India to increase, increasing Indian wage rates. This is because in due to outsourcing the demand for labor in India increses which will also increases and the inverse effect will be there in U.S.

A monopolist engages in price discrimination by charging a higher price when marginal cost is lower. This is true because monopolists aim is to maximize their profit and due to lack of ompetition they charge higher prices.

John has just tried on the most comfortable pair of pants that he has ever known. The pants are an experience good. This is because experience goods are those whose charectaristics are easily obtained after consumption.

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