Asked by Almer Andromeda on Jun 15, 2024
Verified
How can the United States compete successfully with a relatively low-wage nation such as Mexico?
Low-Wage Nation
A country where the general level of wages and salaries is significantly lower than that of more industrialized and economically developed countries.
United States
A country located in North America, consisting of 50 states and known for being a federal republic with a diverse population and economy.
Mexico
A country in North America known for its rich cultural heritage, diverse landscapes, and strong economic sectors such as manufacturing and agriculture.
- Analyze the principal imports and exports of the United States and their importance in international commerce.
- Understand the concept of comparative advantage and its significance in the context of global commerce.
Verified Answer
MM
Michael MutindaJun 21, 2024
Final Answer :
If the low wages are a reflection of a low level of productivity, the per-unit cost of Mexico's products will not be any greater than the per-unit costs in the U.S. It is not the level of wages alone that determines the cost of a product, but rather the wage relative to the level of output per hour. Wages in the U.S. are high, but so is the level of productivity, often keeping per-unit costs as low as or lower than those in low-wage nations.
Learning Objectives
- Analyze the principal imports and exports of the United States and their importance in international commerce.
- Understand the concept of comparative advantage and its significance in the context of global commerce.