Exercise 13.22. Consider the baseline endogenous technological change model with expanding machine varieties in Section 13.1. Suppose that x’s now denote machines that do not immediately depreciate. In contrast, once produced these machines depreciate as an exponential rate δ. References and the rest of the production structure remain unchanged. (1) Define an equilibrium in this economy. (2) Formulate the maximization problem of producers of machines. [Hint: it is easier to formulate the problem in terms of machine rentals rather than machine sales]. (3) Characterize the equilibrium in this economy and show that all the results are identical to those in Section 13.1.