Repeal some of tax breaks to business

Reference no: EM1311331

Suppose the new leadership in Congress decides to repeal some of the tax breaks granted to large businesses during the past several years. If investment tax credits granted earlier are either repealed or eliminated, what impact will the repeal have on the exporting of jobs to foreign countries? Explain using isoquant/icocost theory.

As the larger businesses have to pay more taxes, their spending funds for employment will decrease causing them to probably export more jobs to foreign countries as their labor is cheaper. A great way to compare which way either foreign or domestic labor you as a manager could get more of would be by using the isocost analysis. Isocost will show you how much labor you could get for the same amount of money. Isoquant would work to show you what combo of labor domestic/foreign gives you the same about of ouput.

Reference no: EM1311331

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