6.2 If it manufactures at home, a firm faces input prices for labor and capital of wn...
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6.2 If it manufactures at home, a firm faces input prices for labor and capital of wn and rn and produces qn units of output using Ln units of labor and Kn units of capital. Abroad, the wage and cost of capital are half as much as at home. If the firm manufactures abroad, will it change the amount of labor and capital it uses to produce qn? What happens to its cost of producing qn? M
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