In the context of outsourcing, consider the case where domestic labour and foreign labour are substitutable to some exte

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In The Context Of Outsourcing Consider The Case Where Domestic Labour And Foreign Labour Are Substitutable To Some Exte 1 (164.69 KiB) Viewed 10 times

In the context of outsourcing, consider the case where domestic labour and foreign labour are substitutable to some extent. Suppose foreign wage falls. Which of the following is necessary for demand for domestic employment to decrease? O a. Domestic employment will fall regardless of the relative sizes of the scale and substitution effects on domestic labour. O b. The scale effect on domestic employment is dominated by the substitution effect on domestic employment. O c. The scale effect on domestic employment dominates the substitution effect on domestic employment. O d. The subsitution effect on domestic employment is zero. O e. The scale effect on domestic employment is zero.