Assume That Labor Is the Only Factor of Production and That

question 213

Multiple Choice

Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in the United Kingdom equal $10 per hour.Production costs would be lower in the United States than the United Kingdom if:

• A) U.S.labor productivity equaled 40 units per hour while U.K.labor productivity equaled 15 units per hour
• B) U.S.labor productivity equaled 30 units per hour while U.K.labor productivity equaled 20 units per hour
• C) U.S.labor productivity equaled 20 units per hour while U.K.labor productivity equaled 30 units per hour
• D) U.S.labor productivity equaled 15 units per hour while U.K.labor productivity equaled 25 units per hour

---

Definitions:

Contract Manufactures

Companies engaged in producing goods or components for other companies under a contract, rather than producing their own brand products.