Would a new growth theorist expect economic growth to be very rapid in one of the Communist nations before the fall of Communism? Why or why not?
What will be an ideal response?
No. These centrally planned economies did not provide for private property rights, which reduces the incentives people have to use the assets efficiently. Further, the lack of property rights reduces the incentive to engage in research activity. Finally, these economies tended to be more closed, and there is a negative relationship between protectionism and economic growth. Free trade encourages a more rapid spread of new technology and ideas.
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The above figure shows the marginal benefit to a firm of polluting in the local river while producing its output, and the marginal cost to the surrounding neighbors. The marginal cost of production is zero for the firm
According to Coase's Theorem, which of the following scenarios is most likely to lead to the socially optimal level of pollution? A) The firm owns the river and there are a thousand surrounding neighbors. B) The firm owns the river and there is just one nearby neighbor. C) The river is jointly owned by one thousand surrounding neighbors. D) The firm owns the river, and therefore produces the social optimum no matter what.
Assume that the listed amounts constitute this bank's complete set of accounts. Moolah's:
Answer the question on the basis of the following information for the Moolah Bank.
A. assets are $1,100.
B. liabilities are $1,100.
C. net worth is $300.
D. profit is $1,000.