It Is a Known Fact That the Same Multinational Company

question 12

Multiple Choice

It is a known fact that the same multinational company may pay lower wages to its workers in a developing country than to those in an industrialized country.Why is this not considered an evidence of worker exploitation?

• A)Rich people deserve higher pay.
• B)Once we take into account the difference in the cost of living in both kinds of countries, the wages are actually about the same.
• C)Local wages in developing countries are generally lower than in industrialized countries, with or without globalization.
• D)Workers in developing countries have higher benefits, making the overall wages about the same in both kinds of countries.
• E)Most workers in developing countries are comparatively younger, and they get lower wages because of their lack of experience.

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Definitions:

Individual Profits

The net gain in monetary terms realized by an individual or a single business entity from its investment or business operations.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies if the strategies of the other players remain unchanged.

Oligopoly

A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.

Collusion

An agreement among firms in a market about quantities to produce or prices to charge