Which of the following statements is true?
A) Low wages guarantee that the cost of labor is low.
B) High wages guarantee that the cost of labor is high.
C) The cost of labor is determined by the price and productivity of labor.
D) Labor always is cheaper in poor countries.
E) Unit labor costs are irrelevant.

Question

Quizplus · Accepted Answer

The cost of labor is indeed determined by both the price (wages) and the productivity of labor. Higher productivity can offset higher wages, resulting in competitive labor costs.

Which of the Following Statements Is True