If U.S. workers are paid $16 an hour and Indian workers are paid the equivalent of $4 an hour but U.S. workers can produce four times as many goods as Indian workers in the same amount of time:
A) workers in the United State are paid too much.
B) production will migrate to the United States.
C) production will migrate to India.
D) there is no reason to move production from the United States to India.

Question

Quizplus · Accepted Answer

U.S. workers produce four times as much as Indian workers, making their productivity equal to the wage difference. Therefore, there is no cost advantage to moving production to India.

If US Workers Are Paid $16 an Hour and Indian Workers