In 2000, wages in Malaysia were 10 percent of those in the U.S., and labor productivity in Malaysia was also 10 percent of that in the U.S. This means the unit labor costs were about the same in both countries.

Question

Quizplus · Accepted Answer

Unit labor cost is calculated as the cost of labor per unit of output, and if wages are proportional to labor productivity (as in this case, both being 10% of the U.S. levels), the unit labor costs would indeed be about the same in both countries.

In 2000, Wages in Malaysia Were 10 Percent of Those