The logic of service outsourcing - The Ricardian model It is sometimes argued in editorials or TV commentaries that the modern wave of outsourcing, especially outsourcing of services to Pakistan,...

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Extracted text: The logic of service outsourcing - The Ricardian model It is sometimes argued in editorials or TV commentaries that the modern wave of outsourcing, especially outsourcing of services to Pakistan, defies the logic of the Ricardian model. Let's examine if this is actually the case. The following table presents information on labor productivity in computer component production and call center services in Canada and Pakistan. Assume that Canada has an absolute advantage in both. To complete the following table, choose the number of calls that would be most plausible and consistent with the reality of outsourcing services to Pakistan, and indicate the good in which each country has a comparative advantage. Production per Employee Computer Components Call Center Services Country (Units per hour) (Phone calls per hour) Comparative Advantage Canada 20 10 Call center services Pakistan Computer component production Does the observed pattenrn of eutsourcing from Canada to Pakistan, where Pakistan exports ,support the logic of the Ricardian model? O Yes Call center services 1 O No Computer component production 4 both call center services and computer components 20 computer components neither call center services nor computer components 8. call center services