Labor Cost Advantages Gained by Moving into a Country with Low

question 40

Multiple Choice

Labor cost advantages gained by moving into a country with low wages may be short-lived because ________.

• A)transport costs go up to cancel out the cost savings
• B)tax increases cancel out all labor cost differentials
• C)rivals adopt capital-intensive production methods
• D)competitors follow leaders into low-wage areas

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Definitions:

Evaluative Readjustment

The process of adjusting one's evaluation or appraisal of a situation or information, based on new evidence or perspectives.

Encounter

A meeting or engaging experience between individuals, often leading to an exchange of ideas or a conflict.

Psychoanalytic

Pertaining to the theory and practice of psychoanalysis, which emphasizes unconscious psychological processes and their effects on behavior.

Gestalt

A psychological theory that emphasizes the holistic and intrinsic patterns and shapes people perceive in their visual and experiential worlds.