Differences in productivity are usually the major force behind differences in wages and unit labor costs. Suppose that a single unskilled worker at a pottery factory in Mexico can produce 1 mug per hour. By comparison, suppose that a single unskilled worker at a pottery factory in the United States can produce 14 mugs per hour because more and better machinery generates higher labor productivity. The Mexican mugs and the American mugs are identical in quality and durability and sell for the same price. Assume a U.S. minimum wage of $7.25 per hour and a Mexican minimum wage of $0.644 per hour. Instructions: Round your answers to 2 decimal places. a. If unskilled pottery workers are paid the local minimum wage in both countries, how much is the labor cost per mug for mugs produced in Mexico? For mugs produced in the United States?
Differences in productivity are usually the major force behind differences in wages and unit labor costs. Suppose that a single unskilled worker at a pottery factory in Mexico can produce 1 mug per hour. By comparison, suppose that a single unskilled worker at a pottery factory in the United States can produce 14 mugs per hour because more and better machinery generates higher labor productivity. The Mexican mugs and the American mugs are identical in quality and durability and sell for the same price. Assume a U.S. minimum wage of $7.25 per hour and a Mexican minimum wage of $0.644 per hour. Instructions: Round your answers to 2 decimal places. a. If unskilled pottery workers are paid the local minimum wage in both countries, how much is the labor cost per mug for mugs produced in Mexico? For mugs produced in the United States?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
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Transcribed Image Text:Differences in productivity are usually the major force behind differences in wages and unit labor costs. Suppose that a single
unskilled worker at a pottery factory in Mexico can produce 1 mug per hour. By comparison, suppose that a single unskilled worker at a
pottery factory in the United States can produce 14 mugs per hour because more and better machinery generates higher labor
productivity. The Mexican mugs and the American mugs are identical in quality and durability and sell for the same price. Assume a
U.S. minimum wage of $7.25 per hour and a Mexican minimum wage of $0.644 per hour.
Instructions: Round your answers to 2 decimal places.
a. If unskilled pottery workers are paid the local minimum wage in both countries, how much is the labor cost per mug for mugs
produced in Mexico?
For mugs produced in the United States?
b. With regard to mug production, how much higher are labor costs per hour in the United States?
$
c. With regard to mug production, how much higher are labor costs per unit in Mexico?
d Mahimb
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