If Labor in Mexico Is Less Productive Than Labor in the United

question 96

Multiple Choice

If labor in Mexico is less productive than labor in the United States in all areas of production,

• A)then neither nation can benefit from trade.
• B)then Mexico can benefit from trade but the United States cannot.
• C)then the United States will have a comparative advantage relative to Mexico in the production of all goods.
• D)then both Mexico and the United States still can benefit from trade.

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Definitions:

Progressive Tax Rates

A tax system where the tax rate increases as the taxable amount or income increases, imposing a higher percentage rate on higher income earners.

Welfare Programs

Governmental provisions designed to improve individuals' quality of life, often targeted at the needy.

Illegitimate Births

Births occurring outside of a legally or socially recognized union, often referred to in the context of discussions on social and family dynamics.

Negative Income Tax

A system of income support that provides direct financial assistance from the government to individuals whose income falls below a certain level, effectively subsidizing their income.