Here's a quick supply and demand problem. The officials at Foxconn (The main hub of Apple manufacturing) are going to increase the wages paid to their workers. What do you expect to happen to the price of iPhones and iPads?
I assume that Foxconn's decision to increase wages came from pressure by Apple who has recently been under scrutiny for how foreign labor has been treated. Do you think, though, that Americans would still be pressuring Apple to pay the people who manufacture their products more if they knew what this would do to the price of Apple products?
Here is a great article on how many Apple products have been made. For this article you will only be accountable for reading the first page, if you would like to keep reading please feel free to. Perhaps the line that stood out to me the most was that "Made in America" is no longer a viable option. If Apple were to move their operations back, what do you expect would happen to the price of iPhones, iPads, etc...? Assuming that the price of labor is more expensive in America, which it is, what would be the effect of such a move on the demand for Apple products or the supply of Apple products? Using a supply and demand graph, could you show this?
Here are a few additional questions I would like you to consider.
- From an economic standpoint, does it make sense to use cheapest possible labor?
- From an ethical standpoint, do you feel that Apple is obligated to produce in any one country?
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