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Assume that the new leadership in Congress decides to repeal some of the tax breaks granted to big businesses throughout the past several years. If investment tax credits granted earlier are either repealed or removed, what impact will the repeal have on the exporting of jobs to foreign countries? Describe by using isoquant or icocost theory.

As the larger businesses encompass to pay more taxes, their spending funds for employment will reduce causing them to probably export more jobs to foreign countries as their labor is cheaper. A great manner to compare which way either foreign or domestic labor you as a manager could get more of would be by using the isocost analysis. Isocost will illustrate you how much labor you could get for the similar amount of money. Isoquant would work to show you what combo of labor domestic or foreign gives you the same regarding of output.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M910149

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