a) In lecture, it’s been highlighted that Bt cotton increased agricultural production on both the extensive and intensive margins. What is the extensive margin? What is the intensive margin? 

(b) Draw a graph showing profits as a linear function of pest exposure (number of pests on their land) for both traditional cotton and Bt cotton. Label the regions of the graphswhere farmers adopt and do not adopt Bt cotton. Label the regions where farmers benefit on the intensive vs. extensive margins. 

(c) In the lecture, it’s been described uncertainty over how the technology will be regulated. How do intel-lectual property and regulatory uncertainties affect the incentive to innovate? Why?