A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom.A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom.What is the likely explanation for the difference in wages?
A)U.S.textile workers belong to a union,whereas Vietnamese textile workers do not belong to a union.
B)There is little demand for cotton cloth in Vietnam and great demand in the U.S.
C)Labor is more productive making cotton cloth with a mechanical loom than with a hand loom.
D)Vietnam has a low-wage policy to make its textile industry more competitive in world markets.

Question

Quizplus · Accepted Answer

The likely explanation for the wage difference is that labor is more productive making cotton cloth with a mechanical loom than with a hand loom. This means that a worker using a mechanical loom can produce more cloth in a day than a worker using a hand loom, leading to higher wages in countries with more advanced technology and mechanization.

A Worker in Vietnam Can Earn $6 Per Day Making