Situation 26-2 a Company Is Trying to Decide Whether It

question 78

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. If good Y is produced in the United States, the output per $1 of cost would be ___________________ than if good Y were produced in Mexico, thus it would be best to produce good Y in ____________________.

• A)higher; Mexico.
• B)lower; Mexico.
• C)higher; the United States.
• D)lower; the United States.

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Definitions:

Taking Seriously

The act of giving earnest attention or consideration to someone or something, recognizing its importance or validity.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, 5th Edition, a handbook used by healthcare professionals as a guide to diagnose mental disorders.

Schizophrenia

A severe mental disorder characterized by disturbances in thought, perception, and behavior, leading to hallucinations, delusions, and cognitive impairments.

Stress

The physical or emotional response to demands or pressures that may feel overwhelming or challenging to manage.