Which of the following should be rejected as an important reason for higher wages in the United States than in Mexico?
A)The Mexican demand curve for labor is lower because the marginal productivity of labor in Mexico is low.
B)Mexico has much less capital to work with.
C)Average educational levels are lower for Mexican workers.
D)Technology is used more intensively in U.S.production processes.
E)Most workers in the U.S.belong to unions.

Question

Quizplus · Accepted Answer

The fact that most workers in the U.S. belong to unions is not supported by evidence and cannot be considered an important reason for higher wages. A, B, C, and D are all valid reasons for higher wages in the U.S. compared to Mexico.

Which of the Following Should Be Rejected as an Important