Macro Unit 2

Questions:

1. A representative of the American clothing industry recently made the following statement: “Workers in Asia often work in sweatshop conditions earning only pennies an hour. American workers are more productive and as a result earn higher wages. In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low-wage Asian clothing.” Answer the following: (10 points)

a. Which parts of this quote are positive statements? Which parts are normative statements?

The positive statements include: workers in Asia earning only pennies an hour, American workers are more productive, and American workers as a result earn higher wages. The normative statement is that the government should enact legislation banning imports of low-wage Asian clothing.

b. Would such a policy make some Americans better off without making any other Americans worse off? Explain who and why.

If America directed more energy into manufacturing clothing, it would have to sacrifice the production of other goods and services made in the United States. This would cause the consumption of all goods affected to change. This could potentially cause a negative affect depending on the goods that a sacrificed in order to implement the production of the clothing.

c. Would low-wage Asian workers benefit from or be hurt by such a policy and why?

Low-wage Asian workers would be affected negatively as well. They depend on those jobs I am sure in order to support their families, but also depend on the money from other companies that import their product. The workers would then have to produce something different in exchange for the clothing. If this item is imported from the US or any other country then that country would lose business from the Asian country.

2. Referring to the same situation in question 1, but instead of legislation banning the imports, assume that the government enacts a special tax...