Situation 26-2 A Company Is Trying to Decide Whether It Should Produce

question 52

Multiple Choice

Situation 26-2
A company is trying to decide whether it should produce good Y in the U.S. or in Mexico. Suppose a U.S. worker earns $12 per hour and a worker in Mexico earns $4 per hour. Also suppose that the marginal physical product (MPP) of the U.S. worker is 10 units of good Y and the MPP of the Mexican worker is 5 units of good Y.
-Refer to Situation 26-2. The output produced per $1 of cost in the U.S. is

• A)120 units of good Y.
• B)0.83 units of good Y.
• C)22 units of good Y.
• D)2 units of good Y.

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Definitions:

Full-Time Wages

The total earnings received by an employee who works the full number of hours defined as full-time by their employment agreement.

Employed Full Time

The condition of working a full-time job, typically involving a minimum number of hours defined by the employer or by laws within a given country.

Salary

The set amount of money an individual receives from employment before taxes and deductions, typically expressed on an annual basis.

Childhood Sexual Abuse

Refers to the involvement of a child in sexual activity that he or she does not fully comprehend, is unable to give informed consent to, or for which the child is not developmentally prepared and cannot give consent.