1. A U.S. electronics firm is considering moving its production to a plant in Mexico. Its estimated production function is = 5²³. The marginal product of labor is 10³ and the marginal product of capital is 15²². The Firms 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 $6, and the cost of capital is $9.

A - How many L and K does this firm need to hire in each country to make 2 million units in that country? (4 million units in total)

B - How much does it cost for the firm to make 2 million units in each country?