Bu204 Macroeconomics Unit 2 Assignment

Topics: Economics / Pages: 8 (1830 words) / Published: Oct 21st, 2012
Renea Frymoyer
BU204
01
September 29, 2012

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:

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

Positive statements are “claims that attempt to describe the world as it is” (Mankiw, 2011, p. 31).
Normative statements are “claims that attempt to prescribe how the world should be” (Mankiw, 2011, p. 31).

Positive statements * 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.
Normative statements * In order to preserve the dignity of the American workplace, 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. “In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low-wage Asian clothing.”
Sweatshops once existed in the United States. With the accumulation of capital, technology was developed and implemented; workers became more educated, productive and their income increased; and working conditions improved (Hendrickson, 2006). This is the process of economic development.
The explosion of sweatshops abroad has led to the decline of the apparel industry in the United States (Hendrickson, 2006). Economists are known to have conflicting views due to differences in values and perceptions (Mankiw, 2011, p. 34-35). Economist Josh Hendrickson believes it is

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