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Go back to the model with firm performance differences in a single integrated market (pages 172-175). Now assume that a new technology becomes available. Any firm can adopt the new technology, but its use requires an additional fixed-cost investment. The benefit of the new technology is that it reduces a firm's marginal cost of production by a given amount.
a. Could it be profit maximizing for some firms to adopt the new technology but not profit maximizing for other firms to adopt that same technology? Which firms would choose to adopt the new technology? How would they be different from the firms that choose not to adopt it?
b. Now assume that there are also trade costs. In the new equilibrium with both trade costs and technology adoption, firms decide whether to export and also whether to adopt the new technology. Would exporting firms be more or less likely to adopt the new technology relative to non-exporters? Why?
Consider two economies with identical technologies and identical initial conditions but with different corporate tax rates, τ and τ' . Determine the relative income of these two economies (as a function of time).
finds that they almost always end up costing
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this is a research paper, not an opinion paper. You should be able to justify every statement in the paper with published material.
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Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh's first idea is to quit giving complimentary cocktails, wine, and beer to the international flying public. He calculates this will save 5,000,000 drinks
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State the slope of the line of best fit. Carefully interpret the meaning of the slope in a sentence or two. Find and state the value of r2, the coefficient of determination, and r, the correlation coefficient.
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