Compare pure competition, pure monopoly, monopolistic competition, and oligopoly for technological advance in the form of new product development
What will be an ideal response?
In the strict model of pure competition, firms have little ability to achieve technological advance in product development because they do not earn economic profits. One might argue that the highest degree of product development would come under oligopoly because of the investment potential and rivalry but an oligopoly can also be complacent if it has a stable market share and is earning economic profits without developing new products. Monopoly has only the threat of potential competition to motivate its product development, but this competition is very limited, so it has little incentive to innovate. Monopolistic competition would be strongly motivated to innovate by competition, but may not have the resources for extensive product development.
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The utility of a good is:
a. different for different consumers. b. the same for all consumers. c. constant no matter how much is consumed. d. related to the cost of producing it. e. easily measured.
Suppose a central bank takes actions that will lead to a higher inflation rate. The public, however, is slow to adjust its expectation of inflation. Then, in the short run, unemployment
a. rises. As inflation expectations adjust, the short-run Phillips curve shifts right. b. rises. As inflation expectations adjust, the short-run Phillips curve shifts left. c. falls. As inflation expectations adjust, the short-run Phillips curve shifts right. d. falls. As inflation expectations adjust, the short-run Phillips curve shifts left.
The trade-off between physical capital and current consumption:
A. involves giving up more current consumption for rich countries, since they have so much. B. is easier for poorer countries than rich ones. C. involves giving up less current consumption for poor countries, since they have little. D. is harder for poorer countries than rich ones.
The current price of a government bond is $920. The bond pays $90 in interest this year. At the end of the current year, the bond matures, and the principal of $1,000 is repaid. What is the return to the holder of this bond?
A) 1 percent B) 8 percent C) 9 percent D) 17 percent