Question content area

Part $1$

A U$.$S$.$ synthetic rubber manufacturer is considering moving its production to a Japanese plant. Its production function$$ is:

q equals Upper L Superscript $0\mathrm{.}50$ Baseline Upper K Superscript $0\mathrm{.}50$q$=$L$0\mathrm{.}50$K$0\mathrm{.}50$

$($based on$$ Flath, $2011).$

In the United$$ States,

wequals$=$$$1010$equals$=$r$.$

At its Japanese$$ plant, the firm will pay a

$5050\%$

lower wage and a

$5050\%$

higher cost of$$ capital:

$$w$*$equals$=$$$6\mathrm{.}676\mathrm{.}67$

and

$$r$*$equals$=15\mathrm{.}0015\mathrm{.}00.$

Part $2$

What are L and K and what is the cost of producing

qequals$=100$

units in both$$ countries?$($for all$$ responses, enter a real number rounded to two decimal$$ places$)$

Part $3$

In the$$ U$.$S$.,$ L is enter your response here