31 May Question Labor, GDP, and firms
Question
The most important resource for all firms is labor. Please address the following questions in a 3 page essay.
1. Labor is an important factor of production for all firms. The most recent unemployment rate is estimated at 7.7% (February 2013). Economists have identified three types of unemployment. Which type would affect Microsoft corporation. Explain.
2. Think about other employment issues such as outsourcing. Do you think Microsoft corporation would benefit from outsourcing? If you chose a firm in which outsourcing is not feasible, you can still discuss the advantages (or disadvantages) of outsourcing.
3. If a U.S. firm hires foreign workers abroad, would these wages count in the U.S. GDP? (i.e. an Indian citizen working in a call center for Microsoft in India) Why or why not?
4. Based on the economic indicators, what are your forecasts for Microsoft corporation in terms of profit, employment, and production?
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