What Happens to the Labor Supply Curves in Both Countries

question 96

Multiple Choice

What happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to the United States?

• A)Labor supply decreases in Mexico and decreases in the United States.
• B)Labor supply increases in the United States and increases in Mexico.
• C)Labor supply increases in the United States and decreases in Mexico.
• D)Labor supply increases in Mexico and decreases in United States.

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Definitions:

Operating Income

Earnings from a company’s primary business activities, excluding deductions of interest and taxes.

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and direct labor.

Transfer Price

The price at which goods and services are sold between divisions within the same company, often used for accounting and tax purposes.

Variable Cost

A cost that varies directly and proportionally with changes in production volume or activity level, such as materials and labor costs.