Exam #2 Flashcards
All human societies have to answer 3 economic questions:
- ) What is going to be produced
- ) How are the chosen goods to be produced
- ) Who is going to get these goods
An implication of the AK model is that:
investment can generate permanent long-term growth
In a market economy, the need to recover the up-front costs of innovation means that perfect competition:
is not compatible with innovation.
A imperfectly competitive producer:
faces a downward sloping demand curve.
All other things equal, when the total amount/supply of productive factors and resources, R, increases, the cost of innovation (COI) curve will:
shift down because an increase in R lowers the price of innovation resources, w.
In Rebelo’s AK model, the saving function is:
an upward-sloping straight line.
Market systems are based on the principle of private property
True
The __________ provided funds for the establishment of agricultural experiment stations at each of the land-grant institutions.
1887 Hatch Act
Romer’s mathematical “Schumpeterian” model of technological change incorporates the following fundamental idea(s):
a. Innovations are generated by intentionally employing costly (scarce) resources to create new products, ideas, methods, etc. Incorrect
b. Innovators must compete with producers to employ the economy’s scarce, and thus costly, resources.
c. Innovation creates new products and techniques that are better, cheaper, and more attractive.
All of the above
Land grant universities in the United States:
stimulated technological innovation in a perfectly-competitive industry like agriculture
Which of the following concepts is not found in the Schumpeterian R&D model:
perfect competition.
_______in the Soviet Union and Eastern Europe evolved into a highly centralized command economy with most property controlled by the state.
Communism
In the R&D model of technological progress, the rate of technological progress is:
inversely (negatively) related to the cost of innovation
According to Schumpeter, entrepreneurs are the people who:
a. see the economic potential of inventions.
b. guide and organize the innovative process that employ inventors.
c. who arrange for the funds to finance the enterprise.
Do all of the above
In a traditional system of organization, how goods are distributed is often significantly influenced by
a. religion
b. caste
c. social obligations
All of the above
Total factor productivity is defined as the residual between the:
average growth rate of the factors of production and the growth rate of real output