What is the role of profits in the neoclassical growth theory versus the new growth theory?
What will be an ideal response?
Profits play essentially no role in the neoclassical growth theory. In the new growth theory, they are key because it is based on the idea that technological change results from the choices that people make in the pursuit of profit. Discoveries result from people's choices, such as whether to look for something new and, if so, how intensively to look. Profit affects these choices. A new discovery brings the discovered high profits but eventually competitors emerge and the above-average profit is competed away.
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Assume that the lost output due to tax distortions is proportional to the square of the tax rate
If the average cost of the distortion created by taxes is currently $1000, and the tax rate is increased from 40% to 50%, the average cost of the distortion created by taxes will increase to A) $383.33. B) $450.00. C) $640. D) $1562.50.
Given the information in the table shown, what is the total revenue when 23 units are produced?
This table shows price and quantity produced for a single firm in a perfectly competitive market.
A. $230
B. $10
C. $23
D. $2.30
Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income
a. True b. False Indicate whether the statement is true or false
The cost of repositioning an automobile gas tank for greater safety is $11 per vehicle for 12.5 million vehicles. The automobile company places a value on life of $500,000. To justify redesigning the location of the gas tank, the number of deaths expected to occur if the gas tank location is not redesigned would have to be at least:
A. 175. B. 1. C. 100. D. 275.