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Suppose a firm owns two plants making whirlygigs, both with diminishing returns. One in China and one in the U.S. The wage in the US
Suppose a firm owns two plants making whirlygigs, both with diminishing returns. One in China and one in the U.S. The wage in the US is double that of China but for a given level of output, US, workers are more (but not twice as) productive. Both plants are of equal fixed size, The firm will: (1 Point) produce more in the US than China but some in each produce more in China than the US, but some in each produce only in the US. produce in both countries but whether production is greater in the US or China depends on demand
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