Situation 26-2 a Company Is Trying to Decide Whether It

Multiple Choice

Situation 26-2 A company is trying to decide whether it should produce good Y in the U.S. or in Mexico.  Suppose a U.S. worker earns $12 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 10 units of good Y and the MPP of the Mexican worker is 5 units of good Y.
Refer to Situation 26-2. The output produced per $1 of cost in the Mexico. is

A) 1.25 units of good Y.
B) 0.80 units of good Y.
C) 9.0 units of good Y.
D) 1.0 units of good Y.