Economics: The Basics 1st Edition by Mike Mandel

تمرين 6

S. companies are opening research facilities in China and India, where the lower cost of labor lets them hire more scientists and engineers. Consider a company trying to develop the next generation of cell phones.
a) Draw the supply and demand curves for innovative activities directed toward the development of new cell phones.
b) Suppose the company moves some of the development of new cell phones to China and India. Does this affect the supply curve or the demand curve for innovative activities? Show the change on your supply-demand diagram.
c) What happens to the quantity of innovative activity when new research centers open abroad? Do we get more or fewer new models of cell phones?