Monopoly is a market structure in which:
a. there are significant barriers to the entry of new firms.
b. the firms face a perfectly elastic demand curve.
c. there are a large number of close substitutes for the good produced.
d. a homogeneous product is sold.
e. the firms are price takers.
a
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A drop in the user cost of capital will lead to an equal ________ in the MPK of profit-maximizing firms, requiring a ________ v*, thus ________ gross investment
A) drop, higher, boosting B) drop, lower, dampening C) drop, lower, boosting D) rise, higher, dampening E) rise, lower, boosting
A key characteristic of the production function in the endogenous growth model presented in the text is that
A) there are increasing returns to scale in human capital. B) there are decreasing returns to scale in human capital. C) there are constant returns to scale in human capital. D) at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital.