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PC-World is a U.S. manufacturer of personal computers. The CEO is looking at opportunities for off-shore production. The selection of the country where PC-World will establish a production facility will depend on the following two factors: 1. The local wage in US$ terms; and 2. The rate of unemployment. According to the CEO, a low wage country will give the company a cost advantage, while a high unemployment rate will mean that there are plenty of workers available to work at the manufacturing facility. How would you advice the CEO regarding the use of these two indicators as the selection criteria?

Microeconomics, Economics

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