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

question 46

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. If good X is produced in the U.S. the output per $1 of cost would be ___________________ than if good X were produced in Mexico, thus it would be best to produce good X in

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

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Definitions:

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A policy of racial segregation and discrimination enforced by the South African government from 1948 to 1994.