Consider two firms producing smart phones one uses a highly


  • Consider two firms producing smart phones. One uses a highly automated robotics process, while the other uses human workers on an assembly line and pays overtime when there is heavy production demand.
  1. Which firm will have higher profits in a recession? In a boom?
  2. Which firm’s stock will have a higher beta?
  • According to supply-side economists, what will be the long-run impact on prices of a reduction in income tax rates?

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Accounting Basics: Consider two firms producing smart phones one uses a highly
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