Eco

K If it manufactures at home, a firm faces input prices of labor and capital of w and r and produces q units of output using L units of labor and K 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 capital and labor it uses to produce q? If the firm produces q units abroad, then it will O A. use the same amount of capital and labor. O B. use more of the more-expensive input and less of the less-expensive input. O C. use less of the more-expensive input and more of the less-expensive input. D. use less capital and less labor. E. use more capital and more labor. What happens to its cost of producing q? The cost of producing q abroad will OA. increase but by less than 100 percent. O B. not change. O C. double. OD. decrease but by less than 50 percent. E. be cut in half