Suppose that a firm is considering opening a plant on the moon, and the current exchange rate is 580 moon pieces (mp) per dollar. Also, the wage rate is9,280 mp per hour. Suppose further that U. S. workers can produce 220 units per hour, whileworkers on the moon are expected to be able to produce 300 units per hour (the lower gravitylevel helps them work faster). (a) What is the "relative" wage rate (in dollars, rounded to the nearest penny) of oper-ating on the moon, after taking productivity differences into account?
(b) Suppose that the U. S. wage rate is$13.50 per hour. If the U. S. managers want tobecome the location of choice for production, and if they cannot lower their wagerate due to labor union agreements, what does the labor productivity in the U. S.need to become (rounded to one decimal place)?