Situation 26-1 a Company Is Trying to Decide Whether It

Multiple Choice

Situation 26-1 A company is trying to decide whether it should produce good X in the U.S. or in Mexico.  Suppose a U.S. worker earns $15 per hour and a worker in Mexico earns $4 per hour.  Also suppose that the marginal physical product (MPP) of the U.S. worker is 12 units of good X and the MPP of the Mexican worker is 3 units of good X.
Refer to Situation 26-1. The output produced per $1 of cost in the U.S. is

A) 0.80 units of good X.
B) 1.25 units of good X.
C) 180 units of good X.
D) 3 units of good X.