Answer: A. Comparative advantage, because products can be made more efficiently in the southern United States and Mexico. Operating costs and wages are lower, and the manufactured products are easily transported to major United States markets.
Explanation: Comparative advantage of a location is the ability to produce a good at lower cost than elsewhere. Lower wages, as well as lower operating costs in Mexico and Southern states achieve this comparative advantage by reducing total cost. Their locations are still quite close to the Midwest and North east, in contrast with popular outsourcing locations such as China. It therefore makes sense to relocate factories to these locations.
The Australia – United States Free Trade Agreement (AUSFTA) is a preferential trade agreement between Australia and the United States modelled on the North American Free Trade Agreement (NAFTA). TheAUSFTA was signed on 18 May 2004 and came into effect on 1 January 2005. On the other hand, tThe United States–Israel Free Trade Agreement is a trade pact between the State of Israel and the United States of America established in 1985 that lowered barriers to trade in some goods. And lastly, the North American Free Trade Agreement is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.<span>
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The answer is the Mediterranean Sea
