Suppose a firm is considering locating a manufacturing facility in a poorer country where wage rates are much lower than in the United States
Why would social capital be a factor in their decision to relocate? Explain in terms of the impact that a lack of social capital may have on the marginal revenue product
Social capital refers to the infrastructure of a particular region or country. If the country in question has inadequate social infrastructure like poor roads or schools then it might not be a good decision to relocate because the firms' workers will have a hard time getting to work and won't be as well educated because of the lack of good schools.
You might also like to view...
In 2017, some banks in Europe had to make interest payments to borrowers rather than receive interest payments from borrowers. Which of the following statements describes this situation?
A) For these banks, the loans increased required reserves. B) These banks were receiving negative nominal interest rates on these loans. C) For these banks, the loans were liabilities instead of assets. D) All of the above are correct.
The manager of Greene Enterprises, Inc., recently estimated its average variable cost (AVC) function to beAVC = 88 - 0.026Q + 0.000003Q2Greene Enterprises faces total fixed costs (TFC) of $300,000. If Greene Enterprises produces 6,000 units of output, what is estimated short-run marginal cost (SMC)?
A. $62.40 B. $83 C. $45.60 D. $92 E. $100