Why does growth occur in two-sector growth models?
What will be an ideal response?
In two-sector growth models, the first sector consists of manufacturing firms that use technology to produce consumption and investment goods for households and other firms. The second sector consists of firms that produce ideas and new technology, E, that are useful in producing manufacturing goods. Endogenous growth arises from the research sector, where new ideas and technology are produced.
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Equilibrium in a monopoly occurs when:
a. the monopolist has driven out all competitors. b. the monopoly firm has sold the maximum number of units. c. the monopoly firm produces the quantity that maximizes its profits (or minimizes loss) where MR = MC. d. the monopoly firm has gotten unions to agree to wage concessions.
When the price of a normal good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease