Compare and contrast the modern view of technological advance with the traditional view
What will be an ideal response?
The traditional view of technological advance was that it was external to the economy. It was a random force to which the economy adjusted and was dependent on the advance of science. Technological advance led to the creation of new products that enhanced or maintained profits for firms. After developing the new products, firms returned to their long-run equilibrium positions.
The modern view is that technological advance is internal to capitalism. Intense rivalry among individuals and firms motivates them to seek and exploit new or expand existing opportunities for profit. Many advances in science are also motivated by the potential for commercial use or profit. Entrepreneurs and other innovators are the drivers of technological advance in a capitalistic system.
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Comparative advantage is most closely related to which of the following concepts?
A) efficiency B) opportunity cost C) fairness D) productivity E) competition
Without any change in the demand for labor, how are the following events likely to change the equilibrium wage and employment level in a dairy farm?
a) An increase in the population of the region where the dairy farm is located b) The establishment of a cotton mill that pays higher hourly wages, near the dairy farm c) The shutdown of a rice farm located near the dairy farm
Which of the following facts about competitive ideas is true?
a. A successful competitive idea should be big in terms of investment. b. A competitive idea is usually built on a foundation of other ideas. c. A competitive idea should necessarily be scientific. d. A successful competitive idea must be original.
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.