About concept of specialization and comparative advantage

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Reference no: EM131244608

In the first chapter, we learned about the concept of specialization and comparative advantage. By learning these concepts, we tend to agree that specialization along lines of comparative advantage and then trade is beneficial. As Adam Smith stated in his book, The Wealth of Nations, he said that no "prudent master [will] make at home what it will cost him more to make than buy."

Now, consider outsourcing scenario, where American firms have foreign firms/countries produce certain goods or services for them instead of producing them in the US.

Issues to discuss:

In your opinion, does the outsourcing create problems for the US economy?

In your opinion, should we restrict trade with foreign firms/countries who produced these goods and services?

Keep in mind that there is no right or wrong answer for these types of questions. Just make sure you provide explanations/facts/data to back up your opinion.

Reference no: EM131244608

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