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2. A firm that is located in country H. where price levels are p= (1.2), needs to send one of its two employees to its
2. A firm that is located in country H. where price levels are p= (1.2), needs to send one of its two employees to its branch in country F. However, in country F price levels are pl = (3.1), so the firm will have to pay additional salary to ensure that its emplovee is equally well-off in country F as she was in country H. Suppose the utility functions of the two employees are w1(x1,12) = In 21 + In 12 and u2(41, 12) = 1 + 12. The two employees are otherwise identical, including current salary. If the firm wants to minimize the additional salary it needs to pay, which employee should it send? Explain
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