A U.S. electronics manufacturer is considering moving its production abroad. Suppose its production function is9=L0.7K0.3In the United States, w = $7 and r = 3. In Mexico, the wage is 50% lower than in the United States but the firm faces the same cost of capital:w* = $3.50 and r* = 3.What are L and K and what is the cost of producing q = 100 units in both countries? (for all of the following questions, enter a numeric responseusing a real number rounded to two decimal places)and the cost of production is $and the cost of production is $In the U.S., L isIn Mexico, L isKisKis

A production function shows the connections between inputs (such as labor and capital) and the…

U.S. electronics manufacturer is considering moving its production abroad. Suppose its production function is q=L0.7K0.3 the United States, w = $7 and r=3. In Mexico, the wage is 50% lower than in the United States but the firm faces the same cost of capital: *$3.50 and r* = 3. What are L and K and what is the cost of producing q = 100 units in both countries? (for all of the following questions, enter a numeric response sing a real number rounded to two decimal places) the U.S., L is, K is, and the cost of production is $ Mexico, Lis Kis and the cost of production is $

U.S. electronics manufacturer is considering moving its production abroad. Suppose its production function is q=L0.7K0.3 the United States, w = $7 and r=3. In Mexico, the wage is 50% lower than in the United States but the firm faces the same cost of capital: $3.50 and r = 3. What are L and K and what is the cost of producing q = 100 units in both countries? (for all of the following questions, enter a numeric response sing a real number rounded to two decimal places) the U.S., L is, K is, and the cost of production is $ Mexico, Lis Kis and the cost of production is $

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 9TY

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