A U.S. electronics ?rm is considering moving its production to a plant in Mexico. Its estimated production function is q = L0.5K0.5. In the U.S., the wage, w is ten dollars, and the cost of capital, r is also ten dollars. In Mexico, the wages is half that in the U.S., but the ?rm faces the same cost of capital: w∗ = 5 and r = r∗ = 10. If the ?rm wants to produce q = 100 units of output, what amount of labor and capital will it choose to utilize in the U.S.? What amount of labor and capital will it choose to utilize in Mexico? What are the total costs of producing at each plant? (Hint: With q = L0.5K0.5, MPL = 0.5L-0.5K0.5 and MPK = 0.5L0.5K-0.5.)