Suppose a U

Multiple Choice

Suppose a U.S. automotive manufacturer was considering moving to Mexico to take advantage of the lower wage rates for unskilled Mexican labor. The typical Mexican worker could produce 20 cars per day, while the firm's typical U.S. worker can produce 50 cars per day. If the firm currently pays its U.S. workers an hourly wage of $25, economic theory suggests that the firm should

A) move to Mexico if the Mexican hourly wage is less than $25.
B) move to Mexico if the Mexican hourly wage is $15.
C) move to Mexico if the Mexican hourly wage is $12.
D) only move to Mexico if the Mexican hourly wage is less than $10.