In the Simplified Offshoring Model with Two Activities, a Fall

question 64

Multiple Choice

In the simplified offshoring model with two activities, a fall in the price of the low-skill intensive input will lead to:

• A) gains to the home firm from offshoring.
• B) losses to the home firm from offshoring.
• C) neither gains nor losses to the home firm from offshoring.
• D) neither gains nor losses to the foreign firm from offshoring.

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Definitions:

Variance

A statistical measurement that represents the degree of spread or dispersion of a set of data points.

Random Variable

A variable that takes numerical forms based on the randomness of certain events.

Probability

A branch of mathematics concerned with the analysis of random phenomena, focusing on the likelihood of different outcomes.

Catch Fish

The act of capturing fish, either for recreational or commercial purposes.