AU.S. electronics firm is considering moving its production abroad. Its production function is: q=L0.50 0.50 (based on Hsieh, 1995), so MP₁ = 0.5q/Land MPK = 0.5q/K. In the United States, w=$10=r. At its Asian plant, the firm will pay a 10% lower wage and a 10% higher cost of capital: w* = $9.09 and r* = $11.00. What are L and K and what is the cost of producing q= 100 units in both countries? (for all responses, enter a real number rounded to two decimal places) In the U.S., L is 100, K is 100, and the cost of production is $ 2000 In Asia, L is

AU.S. electronics firm is considering moving its production abroad. Its production function is: q=L0.50 0.50 (based on Hsieh, 1995), so MP₁ = 0.5q/Land MPK = 0.5q/K. In the United States, w=$10=r. At its Asian plant, the firm will pay a 10% lower wage and a 10% higher cost of capital: w* = $9.09 and r* = $11.00. What are L and K and what is the cost of producing q= 100 units in both countries? (for all responses, enter a real number rounded to two decimal places) In the U.S., L is 100, K is 100, and the cost of production is $ 2000 In Asia, L is

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.5CE

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