Journal Topic 9: The Myth of Outsourcing's Effect

• Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Comparative advantage is the ability to produce a particular good or service at a lower marginal and opportunity cost over another.Outsourcing is the contracting out of a business process, which an organization may have previously performed internally to an independent organization from which the process is purchased back as a service. Globalization and comparative advantage leads to outsourcing, because outsourcing makes economic more efficient and also leads to more opportunities. The characteristics of an open economy is trading with international countries. Outsourcing is productive and efficiency. With outsourcing, prices are lower than without it. Marginal product of labor with outsourcing is higher.