Question

In Mexico, 6 workers, each making the equivalent of $40/day can make a combined total of 40 units/day. In (rural) China, 10 workers, each making the equivalent of $20/day can make a combined total of 70 units/day. In the US, 2 workers, each making the equivalent of $200/day can make a combined total of 150 units/day. Which would be the most appropriate location to manufacture considering direct labor costs alone

Answer 1

US

Step-by-step explanation:

Particulars Number Output Labor cost Total Labor productivity

of labor per day per day labor cost (d ÷ c)

(a) (d) (b) c = (a × b)

China 6 40 $40 $240 0.1667

Mexico 10 70 $20 $200 0.3500

US 2 150 $200 $400 0.3750

As we can see that the labor productivity is more in the US so the same is to be considered as an appropriate location