Topic 9: The Myth of Outsourcing's Effect‏

The comparative advantage of globalization is that a country is most likely to find either labors or products that are cheaper from other countries. Outsourcing are the labors, goods or any products that are from other countries. The comparative advantage of globalization is strongly related to outsourcing because the main advantage of globalization is that people can get what they want for a cheaper price. This is all because outsourcing, every county have their own products and what they are good at. Open economy is an economy in which there are economic activities between domestic community and outside. Production and efficiency is related to outsourcing because the price of producing something might be cheaper if it’s import from other countries. When the price of production decrease, the production will become more efficient. Without outsourcing, the cost of producing something will increase. This is because the production will be more expensive base on the labor and the tools that they use to produce product will be more expensive. Outsourcing relate to the concept of opportunity costs because when outsourcing occurs, people start to work for other countries and people from other countries come to our country to find jobs. Therefore, the unemployed rate increase and cost the increase of opportunity costs. The marginal product of labor with outsourcing will be greater than the marginal product of labor without outsourcing because the price for labor with outsourcing will be cheaper.