Which of the following statements is true?
A) Low wages guarantee that the cost of labor is low.
B) High wages guarantee that the cost of labor is high.
C) The cost of labor is determined by the price and productivity of labor.
D) Labor always is cheaper in poor countries.
E) Labor is always more expensive in rich countries.

Question

Quizplus · Accepted Answer

The cost of labor is not solely determined by the wage level but also by the productivity of labor. High productivity can offset high wages, and low productivity can make low wages more costly in terms of output per dollar spent.

Which of the Following Statements Is True