A U.S. apparel manufacturer is considering moving its production abroad. Its production function is q = L0.7K0.3 (based on Hsieh, 1995). In the United States, w = 7 and r = 3. At its Asian plant, the firm will pay a 50% lower wage and a 50% higher cost of capital: w = 7/1.5 and r = 3 * 1.5. What are L and K, and what is the cost of producing q = 100 units in both countries? What would be the cost of production in Asia if the firm had to use the same factor quantities as in the United States? M