Situation 26-1 a Company Is Trying to Decide Whether It

question 171

Multiple Choice

Situation 26-1 A company is trying to decide whether it should produce good X in the U.S. or in Mexico.  Suppose a U.S. worker earns $15 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 12 units of good X and the MPP of the Mexican worker is 3 units of good X.
Refer to Situation 26-1. The output produced per $1 of cost in Mexico is

• A)12.0 units of good X.
• B)1.0 units of good X.
• C)1.33 units of good X.
• D)0.75 units of good X.

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Definitions:

Iroquois Tribe

A historically powerful and influential group of Native American peoples in North America, known for forming the Iroquois Confederacy.

Shaman

A person regarded as having access to, and influence in, the world of good and evil spirits, typically among indigenous peoples, often acting as healer or spiritual leader.

Trading

The act of buying, selling, or exchanging goods and services between people, businesses, or countries.

Californian Indians

Indigenous peoples native to California, with diverse cultures, languages, and social structures, significantly impacted by European colonization.