Castillo-CBM 600|page 1

Outsourced Movie Analysis

Zoila Castillo
CBM600
Castillo-CBM 600|page 2
Describe which international economic theory is behind the theme of the movie
outsourced? (two lines, 1 point)
The law of comparative advantage provides a logical explanation of international trade
which is essentially the idea of two countries, that are etter at different things enefit
fro! focusing on their strength and "trading# with each other$
1. Please identify the factor(s) which moves from source country to host country? (one
line, 2 points)
%aor, is the factor that !oves fro! source country to host country$
2. Please identify the winners and losers in this movie. elect the appropriate model
and develop the welfare analysis to !ustify your claim$ (a page, 10 points)
To deter!ine the winners and looser is not easy, since there are & perspectives the source
and the host country$ 'n the case of the !ovie outsourced 'ndia is a winner, ecause the
wages and the (uantity of laor increase$ And the looser in this case will e the )nited
*tates+ there is decrease in the (uantity of laor, due to !oving the call centers to 'ndia$
But we can,t deny that the owners of the co!panies are the pri!e winners in outsourcing
and !igration laor situation$
Efects of Migration Labor in India and the US

Castillo-CBM 600|page 3
3. "hy does the host country participate in this #ame? (one line, 2 points)
-ost country participated in this ga!e ecause rings !ore .os and the wages rises$
'ndia produces more goods using fewer resources.
4. $dentify opportunities and threats the company faced in the host country.(5 points)
Threats/ econo!ical0political instaility and possile co!!unication prole!s$
Benefits/ increase in productivity and inco!e, due to cheaper wages in the host country$
5. "hat would you predict for the future of the source country in the short%term? (two
lines, 5 points)
'n the short run the une!ploy!ent rate will increase in the source country$ At the sa!e
ti!e buyers receie consumer surplus and t!e sellers ac"uire producer
surplus.
6. $llustrate at least two (2) positive conse&uences and at least two (2) ne#ative
conse&uences attached to #lobal business trade. (5 points)
Castillo-CBM 600|page #
Positive Consequences: a1 'ncrease welfare for all trading partners 1 'ncrease in
productivity at a lower cost c1 creates international co!petition which then !a2es
goods and services cheaper d1 Consu!ers can have greater access to a wider variety
of goods
Negative Consequences: a1 %oss of .os 1 3educed wages c1 'ncrease in foreign
det d1 'nternational trade can also result in destruction and exhaustion of natural
resources$
7. "hat are the policies a source country can employ to minimi'e outsourcin#? (one
line, 5 points)
*o!e of the policies are trade arriers such as/ (uotas, tariffs, susidies, e!argo, and
currency devaluation$