Suppose you work for an investment firm in Boston. You derive utility from consumption, as described by the utility function U(C), where C denotes consumption and U() is an increasing function. Consumption is a composite of food and housing given by:

where CF and CH denote, respectively, consumption of food and housing.

Suppose that in your current job, you make $250,000 per year. Your company offers you a one-year

position in its Mexico branch located in Tijuana. In Boston the price of food is $50 per unit and the

price of housing is $750 per unit. Food is internationally traded, but housing is non-tradable. The

dollar/Mexico peso exchange rate is 5 pesos per dollar. The price of housing in Tijuana is 2,000 pesos.

Suppose that all you care about is to maximize your utility and that you always spend all of your

income on consumption (no savings).

Question - Your boss would like to know what would be the minimum income (in dollars) you would require to be willing to work in Tijuana. What would you answer and show your work?