If the United States can make auto parts in less time than Mexico, then why are U.S. auto parts made in Mexico?

a. Trade is based on comparative advantage, not absolute advantage.
b. Mexico has a larger labor force and more manufacturing sites.
c. North American manufacturing is evenly divided based on treaties.
d. Mexican suppliers have an absolute advantage over U.S. companies.


a. Trade is based on comparative advantage, not absolute advantage.

Economics

You might also like to view...

The price specified on an option at which the holder can buy or sell the underlying asset is called the

A) premium. B) call. C) strike price. D) put.

Economics

When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP

a. True b. False Indicate whether the statement is true or false

Economics

Which of the following would generate positive externalities?

a. flu vaccinations b. pesticides used to create greater yields per bushel c. cigarette smoking in elevators d. litter left at the beach e. an unkempt front yard

Economics

After Hurricane Katrina, construction wages in New Orleans rose partly because of the loss of a working population

a. True b. False Indicate whether the statement is true or false

Economics