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Chapter 21: Q.6 (page 522)

Do the jobs for workers in low-income countries that involve making products for export to high-income countries typically pay these workers more or less than their next-best alternative?

Short Answer

Expert verified

They typically pay these workers more than their next-best alternative.

Step by step solution

01

Step 1. Meaning

Low-income countries are developing countries with low capita GDP per year.

High-income countries are developed countries With high capita GDP per year.

02

Step 2. Explanation

These countries typically pay workers more than their next-best alternative,

like, if Adidas firm won鈥檛 pay workers at least as they would be earned like in subsistence rural living, many of them never go for work with Adidas.

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Most popular questions from this chapter

Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?

The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 21.6 and Table 21.7.

a. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?

b. What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell?

c. Sketch two supply and demand diagrams, one for each country, in the situation before trade.

d. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade.

e. If the Land of Submarines imposes an antidumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country.

f. Does your general answer change if the Land of Submarines imposes an import quota of 70?

Why do you think that the GATT rounds and,

more recently, WTO negotiations have become longer and more difficult to resolve?

Is international trade likely to have about the same effect on everyone鈥檚 wages?

From the Work It Out "Effects of Trade Barriers," you can see that a tariff raises the price of imports. What is interesting is that the price rises by less than the amount of the tariff. Who pays the rest of the tariff amount? Can you show this graphically?
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