Assume that wages in the U.S. are five times as high as wages in Mexico. The U.S. will export labor-intensive goods to Mexico if the productivity of its labor force is more than five times as high as the productivity of the Mexican labor force.

Question

Quizplus · Accepted Answer

If U.S. labor productivity is more than five times that of Mexico, the U.S. can produce labor-intensive goods more efficiently, making it beneficial to export these goods to Mexico despite higher wages.

Assume That Wages in the U