If Labor in Mexico Is Less Productive Than Labor in the United

question 96

Multiple Choice

If labor in Mexico is less productive than labor in the United States in all areas of production,

• A)then neither nation can benefit from trade.
• B)then Mexico can benefit from trade but the United States cannot.
• C)then the United States will have a comparative advantage relative to Mexico in the production of all goods.
• D)then both Mexico and the United States still can benefit from trade.

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Definitions:

Delivery Cycle Time

The period from when a customer order is received to when the finished product is shipped.

Throughput Time

Throughput Time is the total time taken to produce a product, from the start of production to its completion.

Manufacturing Cycle Efficiency

A measure of the efficiency of the production process, calculated as the ratio of value-added time to total cycle time.

Margin

The difference between the selling price of a product and its cost, typically expressed as a percentage of the selling price.