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Suppose a Firm Is Considering Locating a Manufacturing Facility in a Poorer

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Essay

Suppose a firm is considering locating a manufacturing facility in a poorer country where wage rates are much lower than in the United States. Why would social capital be a factor in their decision to relocate? Explain in terms of the impact that a lack of social capital may have on the marginal revenue product


Definitions:

Persuasion

The act of convincing someone to do or believe something through reasoning or argument.

Undue Influence

Manipulation or pressure exerted over another person, undermining their free will and leading to an unfair agreement or decision.

Liable

Being legally responsible or obligated to compensate for harm caused by one's actions or negligence.

Auction

A public sale where goods or property are sold to the highest bidder.

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