First, what are the primary determinants of output per worker? And second, to what extent can each cause a permanent change in economic growth?
What will be an ideal response?
The two primary determinants of growth are capital accumulation and technological progress. Capital changes when there are changes in investment and, therefore, the saving rate. Because the saving rate cannot increase forever, capital accumulation cannot cause permanent changes in economic growth. Technological progress, on the other hand, can result in permanent changes in economic growth.
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What is meant by market power? What are the ways in which a monopoly gains market power?
What will be an ideal response?
Game theory is used in a number of areas in economics. What is the primary reason that it is used in analyzing oligopoly type market structures?
a. The firms are producing a similar product b. The firms are producing differentiated products c. The demand curve facing the oligopolistic firms is perfectly inelastic d. The mutual interdependence of firms in industries with a small number of firms e. The demand curve the oligopolistic firm faces is downward sloping