Write a scenario that would cause a shift in labor supply and demand.?
Answers:
Upward or downward shifts are a product of two factors: number of qualified workers and demand for product or service. The exportation of jobs, e.g. outsourcing, upsets the natural formula since demand for product or service may remain constant or even rise while the number of qualified workers in the marketplace sharply increases (because their jobs have been exported overseas), thus lowering wages and increasing business profits.
The wider economic effects of all this are painfully obvious. Joe the Windows tech loses his job or can't earn a decent living and therefore can't afford insurance or that monthty bus pass or that new home he was hoping to buy. Bob the insurance guy can't buy a computer. Eddie the bus driver gets laid off. And Zelda the real estate broker must sell her house or face foreclosure.
The point is, it is both wrong and deceitful to consider any business or industry in isolation to the general economy in which it exists.
Remember that the next time you're stuck on the phone talking to Kishore in Bangalore, India about the problem with Windows.
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