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Kelsea Villalpando
on Dec 12, 2024

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Suppose a U.S. automotive manufacturer was considering moving to Mexico to take advantage of the lower wage rates for unskilled Mexican labor. The typical Mexican worker could produce 20 cars per day, while the firm's typical U.S. worker can produce 50 cars per day. If the firm currently pays its U.S. workers an hourly wage of $25, economic theory suggests that the firm should

A) move to Mexico if the Mexican hourly wage is less than $25.
B) move to Mexico if the Mexican hourly wage is $15.
C) move to Mexico if the Mexican hourly wage is $12.
D) only move to Mexico if the Mexican hourly wage is less than $10.

Wage Rates

The amount of money paid to workers per unit of time, often an hour, reflecting compensation for labor.

Labor Productivity

The output per worker, measuring how efficiently labor is used in the production process.

  • Grasp the influence of international commerce on employment needs within a country’s economy.
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daisy annieDec 18, 2024
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