【文章內(nèi)容簡(jiǎn)介】 host countries are in dire needs of creating jobs?2. What do you think Nike’s executives might have done differently to prevent the sensitive charges of sweatshop labor in overseas factories?3. Do firms need to consider the socalled corporate social responsibilities in making investment decisions?Suggested Solution to Nike and Sweatshop LaborObviously, Nike’s investments in such Asian countries as China, Indonesia, and Vietnam were motivated to take advantage of low labor costs in those countries. While Nike was criticized for the poor working conditions for its workers, the pany has recognized the problem and has substantially improved the working environments recently. Although Nike’s workers get paid very low wages by the Western standard, they probably are making substantially more than their local patriots who are either under or unemployed. While 169。 2022 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Nike’s detractors may have valid points, one should not ignore the fact that the pany is making contributions to the economic welfare of those Asian countries by creating job opportunities.APPENDIX 1A. GAIN FROM TRADE: THE THEORY OF COMPARATIVE ADVANTAGEPROBLEMS1. Country C can produce seven pounds of food or four yards of textiles per unit of input. Compute the opportunity cost of producing food instead of textiles. Similarly, pute the opportunity cost of producing textiles instead of food.Solution: The opportunity cost of producing food instead of textiles is one yard of textiles per 7/4 = pounds of food. A pound of food has an opportunity cost of 4/7 = .57 yards of textiles.2. Consider the notrade input/output situation presented in the following table for Countries X and Y. Assuming that free trade is allowed, develop a scenario that will benefit the citizens of both countries. INPUT/OUTPUT WITHOUT TRADE_______________________________________________________________________CountryX Y Total________________________________________________________________________I. Units of Input (000,000)_______________________ ______________________________Food 70 60Textiles 40 30________________________________________________________________________II. Output per Unit of Input (lbs or yards)____________________________________________________Food 17 5169。 2022 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Textiles 5 2________________________________________________________________________III. Total Output (lbs or yards) (000,000)____________________________________________________Food 1,190 300 1,490Textiles 200 60 260________________________________________________________________________IV. Consumption (lbs or yards) (000,000)___________________________________________________Food 1,190 300 1,490Textiles 200 60 260________________________________________________________________________Solution:Examination of the notrade input/output table indicates that Country X has an absolute advantage in the production of food and textiles. Country X can “trade off” one unit of production needed to produce 17 pounds of food for five yards of textiles. Thus, a yard of textiles has an opportunity cost of 17/5 = pounds of food, or a pound of food has an opportunity cost of 5/17 = .29 yards of textiles. Analogously, Country Y has an opportunity cost of 5/2 = pounds of food per yard of textiles, or 2/5 = .40 yards of textiles per pound of food. In terms of opportunity cost, it is clear that Country X is relatively more efficient in producing food and Country Y is relatively more efficient in producing textiles. Thus, Country X (Y) has a parative advantage in producing food (textile) is parison to Country Y (X).When there are no restrictions or impediments to free trade the economicwell being of the citizens of both countries is enhanced through trade. Suppose that Country X shifts 20,000,000 units from the production of textiles to the production of food where it has a parative advantage and that Country Y shifts 60,000,000 units from the production of food to the production of textiles where it has a parative advantage. Total output will now be (90,000,000 x 17 =) 1,530,000,000 pounds of food and [(20,000,000 x 5 =100,000,000) + (90,000,000 x 2 =180,000,000) =] 280,000,000 yards of textiles. Further suppose that Country X and Country Y agree on a price of pounds of food for one yard of textiles, and that Country X sells Country Y 330,000,000 pounds of food for 110,000,000 yards of textiles. Under free trade, the following table shows that the citizens of Country X (Y) have increased their consumption of food by 10,000,000 (30,000,000) pounds and textiles by 10,000,000 169。 2022 by McGrawHill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.(10,000,000) yards.INPUT/OUTPUT WITH FREE TRADE__________________________________________________________________________ CountryX Y Total__________________________________________________________________________I. Units of Input (000,000)_______________________________________________________Food 90 0Textiles 20 90__________________________________________________________________________