1. Approximately what percentage of job losses in the first 3 months of 2004 was caused by outsourcing—2, 10, or 25 percent? 2. Consider a bicycle producer that initially employs 200 production...

1. Approximately what percentage of job losses in the first 3 months of 2004 was caused by outsourcing—2, 10, or 25 percent?

2. Consider a bicycle producer that initially employs 200 production workers and 10 customer-service workers. When the firm outsources its customer-service operation to India, the 10 customer-service workers lose their jobs.

a. Explain why the net effect from outsourcing could be a loss of fewer than 10 jobs in the firm.

b. Under what circumstances will there be a net gain in jobs in the firm?