Suppose a U.S. automotive manufacturer was considering moving to Mexico to take advantage of the lower wage rates for unskilled Mexican labor. The typical Mexican worker could produce 20 cars per day, while the firm's typical U.S. worker can produce 50 cars per day. If the firm currently pays its U.S. workers an hourly wage of $25, economic theory suggests that the firm should
a. move to Mexico if the Mexican hourly wage is less than $25.
b. move to Mexico if the Mexican hourly wage is $15.
c. move to Mexico if the Mexican hourly wage is $12.
d. only move to Mexico if the Mexican hourly wage is less than $10.
D
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Most economists attribute the growing income inequality in the United States to
A) trade. B) macroeconomic policies. C) technological change. D) changing values. E) taxes.
A drawback in the use of sensitivity analysis in capital budgeting decisions is that it doesn't
A) permit evaluating alternative outcomes. B) provide estimates of net present values. C) assign probability values to outcomes. D) consider different possible rates of discount.
A nation's account with the International Monetary Fund denominated in special drawing rights is
A) the quota subscription. B) the account at the World Bank. C) portfolio investment. D) the account at the Fed.
YearCPI2010952011100201210520131042014106According to the table shown, what can be said about the cost of living in 2012?
A. Every consumer will experience a 5 % increase in his cost of living from 2011. B. The typical consumer must spend 5 % more in 2012 than he did in 2011 in order to buy the same goods. C. Whatever consumers bought in 2012 cost 5% more than what they spent in 2011. D. None of these statements is true.