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A Worker in Bangladesh Can Earn $1 Per Day Making

question 27

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A worker in Bangladesh can earn $1 per day making cotton cloth on a handloom. A worker in Canada can earn $100 per day making cotton cloth with a mechanical loom. What accounts for the difference in wages?


Definitions:

Marginal Revenue Product

The increase in revenue resulting from the utilization of one extra unit of a factor of production.

Resource

An economic or productive factor required to accomplish an activity or as means to undertake an enterprise and achieve desired outcome.

Marginal Revenue Product

The extra income produced by using an additional unit of a production input, like labor or capital.

Total Revenues

The overall amount of income generated by a business from all its activities, indicating the sales performance over a certain period.

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