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2.151. U.S. electronics firm is considering moving its production to a plant in Mexico. Its estimated production function is I; = 5112553. The marginal product
2.151. U.S. electronics firm is considering moving its production to a plant in Mexico. Its estimated production function is I; = 5112553. The marginal product of labor is 10LK3 and the marginal product of capital is ELLE; The Firm's production function is the same in both countries. However, factor prices are different. In the U.S., cost of the labor is $10, and the cost of capital is $30. In Mexico, labor is cheaper, and wage is E and the cost of capital is $9. a. a. Howr many L and K does this rm need to hire in each country to make 2 million units in that country? [4 million units in total} b. b. How much does it cost for the firm to make 2 million units in each country
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