Describe the process of "creative destruction" using a specific example
What will be an ideal response?
Creative destruction, based on the ideas of Joseph Schumpeter, describes the process whereby older products are driven out of the market by newer products. New products that meet consumer wants in qualitatively better ways will increase the overall standard of living for an economy. Here are some current and historical examples of creative destruction: DVD players replaced video tapes and VHS recorders, calculators replaced slide rules, clocks replaced sundials, cars replaced horses and buggies, disposable diapers replaced cloth diapers, GameBoys and Xboxes replaced Ataris, Internet Explorer replaced NCSA Mosaic, CD players replaced tape players, indoor plumbing replaced outhouses, iPods replaced Walkmans, phones replaced the telegraph, planes replaced trains for travel, digital cameras replaced film cameras, and electricity replaced candlelight and gas lights.
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Suppose the elasticity of demand for a product is 0 and elasticity of supply is 1. If the government imposes a tax on the product, then
A) buyers and sellers pay exactly the same share of the tax. B) buyers pay all of the tax. C) sellers pay all of the tax. D) buyers pay a smaller share of the tax than do sellers, but both buyers and sellers pay some of the tax. E) because the elasticity of demand is zero, the government collects no revenue from this tax.
Using Scenario 2 suppose Bill has eliminated one of the answers but is unsure of which of the remaining four answers are correct. Determine whether it is rational for Bill to guess
What will be an ideal response?
Refer to Table 2-10. What is Fred's opportunity cost of making a pogo stick?
A) 6/7 of a pogo stick B) 1/2 of a unicycle C) 1/3 of a unicycle D) 3 unicycles
What kinds of risks can't be insured?
What will be an ideal response?