| INSTRUCTOR DISCUSSION NOTES:
Now that Firms Around the Globe Look to China to Cure Their Production Cost Woes, Where Are the Workers? |
1. What does the article suggest about China’s comparative advantage in production?
China’s comparative advantage in low-skill factory production is falling, because its wages are less competitive now relative to what firms would have to pay workers from other countries.
2. What is happening to the opportunity cost of education?
Opportunity cost of education is falling—more people are seeking an education instead of working because of the longer-term benefits that more education offers.
3. Why do you think Chinese firms are increasing workplace amenities along with wages?
Increasing amenities is a way of increasing total compensation rather than simply paying higher wages, and may be a cheaper way of increasing total compensation or buy worker loyalty.
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