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bronzeeel187Lv1
28 Sep 2019
1. Importing goods produced by low-wage workers abroad decreasesthe demand for low-skilled U.S. labor that makes competing goods.Supply and demand analysis shows that the equilibrium wage rate oflow-skilled workers making these competing goods and services willfall and experience bears this out. However, dire warnings thatsweatshop labor conditions will be imported along with the foreigngoods are unfounded. Suppose an employer in the United States facescompetition from a foreign producer who pays the equivalent of $1 aday. Explain why, even if there were no minimum wage laws, thisemployer could not succeed by lowering the wage rates of his or herU.S. workers to $1 a day.
2. American Apparel is the largest T-shirt manufacturer in theUnited States. All of its manufacturing is done in a single factorywhich employs 4,000 workers in central Los Angeles. The owner ofthis firm, Dov Charney, has been praised for treating his workerswell:
âPay is performance-related, and amounts to $12 an hour on average,far above California's minimum wage of $6.75. American Apparelstaff can buy subsidized health insurance for $8 a week. They areentitled to free English lessons, subsidized meals and freeparking.â (âThe Hustler,â The Economist, January 4, 2007.)
The article goes on to delineate the high cost of these non-wagebenefits. But Mr. Charney claims not to be an altruist. He issimply trying to maximize profit. Why might Mr. Charenyâs profit behigher by paying all the added benefits to his workers?
3. Answer the following questions:
a. If trade with other countries is prohibited, the Eragoans areconsuming _____ shirts at a price of ______ per shirt.
b. With free trade, for a world price of $4 per shirt, the Eragoansare producing ________ shirts.
c. With free trade, for a world price of $4 per shirt, the Eragoansare consuming ________ shirts.
d. With free trade, for a world price of $4 per shirt, the Eragoansare importing _________ shirts.
e. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, the Eragoans are producing ____________ andimporting _____________shirts.
f. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, how much tariff revenue will the Eragosgovernment collect? ______
1. Importing goods produced by low-wage workers abroad decreasesthe demand for low-skilled U.S. labor that makes competing goods.Supply and demand analysis shows that the equilibrium wage rate oflow-skilled workers making these competing goods and services willfall and experience bears this out. However, dire warnings thatsweatshop labor conditions will be imported along with the foreigngoods are unfounded. Suppose an employer in the United States facescompetition from a foreign producer who pays the equivalent of $1 aday. Explain why, even if there were no minimum wage laws, thisemployer could not succeed by lowering the wage rates of his or herU.S. workers to $1 a day.
2. American Apparel is the largest T-shirt manufacturer in theUnited States. All of its manufacturing is done in a single factorywhich employs 4,000 workers in central Los Angeles. The owner ofthis firm, Dov Charney, has been praised for treating his workerswell:
âPay is performance-related, and amounts to $12 an hour on average,far above California's minimum wage of $6.75. American Apparelstaff can buy subsidized health insurance for $8 a week. They areentitled to free English lessons, subsidized meals and freeparking.â (âThe Hustler,â The Economist, January 4, 2007.)
The article goes on to delineate the high cost of these non-wagebenefits. But Mr. Charney claims not to be an altruist. He issimply trying to maximize profit. Why might Mr. Charenyâs profit behigher by paying all the added benefits to his workers?
3. Answer the following questions:
a. If trade with other countries is prohibited, the Eragoans areconsuming _____ shirts at a price of ______ per shirt.
b. With free trade, for a world price of $4 per shirt, the Eragoansare producing ________ shirts.
c. With free trade, for a world price of $4 per shirt, the Eragoansare consuming ________ shirts.
d. With free trade, for a world price of $4 per shirt, the Eragoansare importing _________ shirts.
e. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, the Eragoans are producing ____________ andimporting _____________shirts.
f. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, how much tariff revenue will the Eragosgovernment collect? ______
2. American Apparel is the largest T-shirt manufacturer in theUnited States. All of its manufacturing is done in a single factorywhich employs 4,000 workers in central Los Angeles. The owner ofthis firm, Dov Charney, has been praised for treating his workerswell:
âPay is performance-related, and amounts to $12 an hour on average,far above California's minimum wage of $6.75. American Apparelstaff can buy subsidized health insurance for $8 a week. They areentitled to free English lessons, subsidized meals and freeparking.â (âThe Hustler,â The Economist, January 4, 2007.)
The article goes on to delineate the high cost of these non-wagebenefits. But Mr. Charney claims not to be an altruist. He issimply trying to maximize profit. Why might Mr. Charenyâs profit behigher by paying all the added benefits to his workers?
3. Answer the following questions:
a. If trade with other countries is prohibited, the Eragoans areconsuming _____ shirts at a price of ______ per shirt.
b. With free trade, for a world price of $4 per shirt, the Eragoansare producing ________ shirts.
c. With free trade, for a world price of $4 per shirt, the Eragoansare consuming ________ shirts.
d. With free trade, for a world price of $4 per shirt, the Eragoansare importing _________ shirts.
e. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, the Eragoans are producing ____________ andimporting _____________shirts.
f. If the world price is $4 per shirt, and the government of Eragosimposes a tariff of $1, how much tariff revenue will the Eragosgovernment collect? ______
manhokwe tawandaLv10
30 Sep 2019
