Cobb-Douglas type,?(?,?)=???? with?+?< 1, resulting in strictly convex isoquants and is the same in South Korea and USA. Suppose that, similar to the podcast, the price per unit of electricity is higher in South Korea than in USA. Suppose that the price of a computer is the same in both countries.
A bitcoin miner, Alex, needs only electricity (E) and computer (K) to mine bitcoin. Assume that the production function for his bitcoin business is of Cobb-Douglas type,?(?,?)=???? with?+?< 1, resulting in strictly convex isoquants and is the same in South Korea and USA. Suppose that, similar to the podcast, the
i. Determine whether it is more expensive to mine one bitcoin in South Korea than in USA based on the above assumptions by using appropriate diagram and explain your answer.
Please keep electricity on the horizontal axis and computer on the vertical axis while drawing your diagram.
Step by step
Solved in 3 steps with 1 images
