Welcome to English Corner
This is part of the English-language corner of the website - a space with different formats of English-language economics content: terms and articles, vocabulary trainers, tests, and materials for the international ("межнар") track. Below is one example of such a task, in the "качественная задача" (case/open-question) format used in international olympiads.
About this business task
This task is adapted from the International Economics Olympiad (IEO) 2026, Economics and Finance Open Questions section. The IEO is the world's largest annual economics and finance competition for high school students, held in a different host country each year, and one of the recognized international ("межнар") tracks that students who succeed at the All-Russian Olympiad in Economics can go on to compete in.
This particular question tests whether you can apply core location-theory and externality concepts to an unusual, real-world-flavored scenario - deciding whether to build an AI computing facility on Earth or in orbit. It combines conceptual reasoning (parts a, c, d) with straightforward quantitative comparison (part b), which is typical of the IEO's Open Question format: you're expected to explain your economic logic, not just produce a number.
Work through each part in order. Try to write a full argument before checking the solution - many points in the real marking scheme are awarded for reasoning, not just the final answer.
The Task
Firm SpaceY must decide whether to locate an AI training facility on Earth or in low-Earth orbit. Sunlight in orbit is free and continuous, but every piece of orbital equipment must first be launched from Earth.
Assume the orbital facility is technically feasible and ignore every private cost not stated explicitly (computing hardware, cooling, communications, radiation shielding, maintenance, insurance, end-of-life disposal). All quantities and prices below are hypothetical.