Question

Explain, using neo-classical theory, whether the wage levels of Canadian and Mexican workers can be at the same level.

Answer 1

Ans:- Neo classical theory is an economic theory,and the theory focus on the purpose or determination on goods, output, income distribution in market through the medium of supply and demand.

While using the neo classical theory it is understood that the Canadian and Mexican workers cannot get wage at the same level. The Mexican workers base salary or entry level salary is lower than that of Canadian workers. The Mexican entry level workers get $ 3.50 per hour. But the average entry level salary of Canadian workers is $ 21.36 per hour. Mexican average salary is very low as compared to Canada because the cost of living of Mexico is very low and Canada's cost of living is high.