Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have

Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have been relatively stable; and that several US states have recently raised their minimum wages from $8.25/hour to $15/hour (or more). What is the likely effect of this change in US wages? Choose the best answer only. Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have been relatively stable; and that several US states have recently raised their minimum wages from $8.25/hour to $15/hour (or more). What is the likely effect of this change in US wages? Choose the best answer only. There will be no effect because the supply chain is already optimized. Wages in Mexico will increase to $15/hour. US companies will shift more of their processing to Mexico. US companies will shift more of their processing from the states that raised their minimum wages to both Mexico and the states with relatively low minimum wages

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Robert Pindyck, Daniel Rubinfeld

9th Edition

0134184246, 9780134184241

More Books

Students also viewed these Economics questions