If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.

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Soumi Biswas · Accepted Answer

Final Answer : True, Explanation :  Labor costs per unit of output depend not only on the wage rates, but also on productivity levels and other factors such as technology and overhead costs. Even if wage rates are lower in Mexico, if productivity levels are lower and overhead costs are higher than in Germany, labor costs per unit of output can still be higher in Mexico.

If wage rates are lower in Mexico than in Germany,labor costs per unit of output can still be higher in Mexico.

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