(Figure: a Firm's Production with and Without Offshoring I) Assuming

question 56

Multiple Choice

(Figure: A Firm's Production With and Without Offshoring I) Assuming skilled workers are needed for R&D and unskilled workers are needed for components, if there is an increase in the price for research and development products, this firm will _____ those products, the demand for _____ will increase, the wages of these workers will rise, and the price line in the graph will _____.

• A) import; unskilled workers; become steeper
• B) export; skilled workers; become flatter
• C) neither import nor export; both workers in the same proportion; not change
• D) import; unskilled workers; become flatter

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Definitions:

Factor Inputs

The resources used in the production of goods and services, such as labor, land, and capital.

Long Run

A period in economics where all factors of production and costs are variable, allowing all inputs to be adjusted.

Short Run

A period in which at least one factor of production is fixed, limiting the ability of a business to expand its output.

Isoquants

A curve representing all combinations of inputs that give the same level of output.