Figure: A Firm's Production With and Without
Offshoring II
(Figure: A Firm's Production With and Without Offshoring
II. If the home country offshores components to a foreign
Country and then exports R&D to the foreign country and
Imports components from the foreign country, then:
A)the exchange is not a beneficial one for the home country.
B)the exchange results in an increase in output at lower prices.
C)consumers benefit due to this offshoring.
D)the exchange results in an increase in output at lower prices and the consumers benefit due to this offshoring.

Question

Figure: A Firm's Production With and Without
Offshoring II 
(Figure: A Firm's Production With and Without Offshoring
II. If the home country offshores components to a foreign
Country and then exports R&D to the foreign country and
Imports components from the foreign country, then:
A)the exchange is not a beneficial one for the home country. 
B)the exchange results in an increase in output at lower prices. 
C)consumers benefit due to this offshoring. 
D)the exchange results in an increase in output at lower prices and the consumers benefit due to this offshoring.

Quizplus · Accepted Answer

The offshoring results in an increase in output at lower prices, which benefits the firm and its consumers. The exchange is beneficial for the home country because it can produce more efficiently by offshoring and importing components from the foreign country.

Figure: a Firm's Production with and Without