Question 1

Joseph Schumpeter is best known for his:

Accepted Answer

A)  AK model. 
B)  model of creative destruction. 
C)  learning-by-doing externality model. 
D)  Investment externality model. 
A)  AK model. 
B)  model of creative destruction. 
C)  learning-by-doing externality model. 
D)  Investment externality model. B

Question 2

In his model of endogenous technological progress based on intentional, costly R&D activity, Paul Romer assumes that:

Accepted Answer

A)  it becomes easier to create new products the more products have already been created. 
B)  it becomes harder to create new products the more products have already been created. 
C)  the marginal cost of creating new products is constant over time. 
D)  it eventually becomes so expensive to create new products that economic growth ceases altogether. 
A)  it becomes easier to create new products the more products have already been created. 
B)  it becomes harder to create new products the more products have already been created. 
C)  the marginal cost of creating new products is constant over time. 
D)  it eventually becomes so expensive to create new products that economic growth ceases altogether. A

Question 3

Among the institutions that are critical for economic growth, Schumpeter included:

Accepted Answer

A)  society's attitude toward business success. 
B)  little protectionism of existing business interests. 
C)  unrestricted entry for new businesses. 
D)  All of the above. 
E)  None of the above. 
A)  society's attitude toward business success. 
B)  little protectionism of existing business interests. 
C)  unrestricted entry for new businesses. 
D)  All of the above. 
E)  None of the above. A

Question 4

Which of the following concepts is not found in the Schumpeterian R&D model:

Accepted Answer

A)  perfect competition. 
B)  creative destruction. 
C)  R&D activity that requires inputs of costly, scarce resources.. 
D)  permanent economic growth. 
E)  endogenous technological progress. 
A)  perfect competition. 
B)  creative destruction. 
C)  R&D activity that requires inputs of costly, scarce resources.. 
D)  permanent economic growth. 
E)  endogenous technological progress.

Question 5

In the R&D model of technological progress, the rate of technological progress is:

Accepted Answer

A)  directly (positively) related to the amount of productive resources. 
B)  inversely (negatively) related to the cost of innovation. 
C)  directly related to the expected profits from innovation. 
D)  inversely related to the interest rate. 
E)  All of the above. 
A)  directly (positively) related to the amount of productive resources. 
B)  inversely (negatively) related to the cost of innovation. 
C)  directly related to the expected profits from innovation. 
D)  inversely related to the interest rate. 
E)  All of the above.

Question 6

Joseph Schumpeter view of competition in the business market revolved around:

Accepted Answer

A)  price competition. 
B)  technological competition. 
C)  reputational competition. 
D)  marketing competition. 
A)  price competition. 
B)  technological competition. 
C)  reputational competition. 
D)  marketing competition.

Question 7

Joseph Schumpeter's concept of competition is:

Accepted Answer

A)  similar to that in a model of a perfectly competitive market. 
B)  based on innovation rather than price. 
C)  mostly competition for government support. 
D)  accurately described by standard microeconomic models of his time. 
A)  similar to that in a model of a perfectly competitive market. 
B)  based on innovation rather than price. 
C)  mostly competition for government support. 
D)  accurately described by standard microeconomic models of his time.

Question 8

According to Joseph Schumpeter:

Accepted Answer

A)  entrepreneurs prefer self-financing to borrowing from established financial markets. 
B)  the role of the financial sector of the economy is greatly exaggerated; innovation requires original thinking, not outside financing. 
C)  financial sectors deflect financing away from innovation and towards established industries. 
D)  innovation would be nearly impossible without a well-functioning financial sector. 
A)  entrepreneurs prefer self-financing to borrowing from established financial markets. 
B)  the role of the financial sector of the economy is greatly exaggerated; innovation requires original thinking, not outside financing. 
C)  financial sectors deflect financing away from innovation and towards established industries. 
D)  innovation would be nearly impossible without a well-functioning financial sector.

Question 9

The speed of technological progress is likely to:

Accepted Answer

A)  slow in the future according to Paul Romer. 
B)  increase because it is a combinatoric process. 
C)  diminish in the future because it is a combinatoric process. 
D)  continue rising in the future because evidence shows the number of patents has been steadily increasing relative to the number of researchers employed. 
A)  slow in the future according to Paul Romer. 
B)  increase because it is a combinatoric process. 
C)  diminish in the future because it is a combinatoric process. 
D)  continue rising in the future because evidence shows the number of patents has been steadily increasing relative to the number of researchers employed.

Question 10

How does a decline in β, the variable that represents the amount of resources needed to generate new technology, impact the Schumpeterian R&D model?

Accepted Answer

A)  Innovations per year increase. 
B)  Innovations per year decrease. 
C)  Innovations per year do not change. 
D)  None of the above. 
A)  Innovations per year increase. 
B)  Innovations per year decrease. 
C)  Innovations per year do not change. 
D)  None of the above.

Question 11

The models of endogenous technological progress usually predict that:

Accepted Answer

A)  population growth causes economic growth to decline. 
B)  population growth hinders technological progress by reducing the capital-labor ratio. 
C)  population growth enhances economic growth. 
D)  All of the above. 
E)  None of the above. 
A)  population growth causes economic growth to decline. 
B)  population growth hinders technological progress by reducing the capital-labor ratio. 
C)  population growth enhances economic growth. 
D)  All of the above. 
E)  None of the above.

Question 12

The present value of innovation curve (PVI) will shift up when:

Accepted Answer

A)  more resources are devoted to innovative activities. 
B)  the average number of resources needed to produce an innovation rises. 
C)  the interest rate increases. 
D)  there is a reduction in the profit that accrues to innovators. 
A)  more resources are devoted to innovative activities. 
B)  the average number of resources needed to produce an innovation rises. 
C)  the interest rate increases. 
D)  there is a reduction in the profit that accrues to innovators.

Question 13

The cost of innovation curve (CoI) in the Schumpeterian R&D model will shift up (to the left) when:

Accepted Answer

A)  more resources are devoted to innovative activities. 
B)  the total supply of productive factors and resources increases. 
C)  the average number of resources needed to produce an innovation rises. 
D)  profit from innovation increases. 
A)  more resources are devoted to innovative activities. 
B)  the total supply of productive factors and resources increases. 
C)  the average number of resources needed to produce an innovation rises. 
D)  profit from innovation increases.

Question 14

Which of the following are conclusions generated by all of the models of endogenous technological progress?

Accepted Answer

A)  Population growth causes growth to slow down. 
B)  Population size has no effect on technological progress. 
C)  The larger the population, the faster the rate of technological progress, ceteris paribus. 
D)  Population growth will slow down as the rate of technological progress accelerates. 
A)  Population growth causes growth to slow down. 
B)  Population size has no effect on technological progress. 
C)  The larger the population, the faster the rate of technological progress, ceteris paribus. 
D)  Population growth will slow down as the rate of technological progress accelerates.

Question 15

An imperfectly competitive producer:

Accepted Answer

A)  can potentially earn a profit. 
B)  faces a downward-sloping demand curve. 
C)  maximizes profit by setting the price where marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above. 
A)  can potentially earn a profit. 
B)  faces a downward-sloping demand curve. 
C)  maximizes profit by setting the price where marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above.

Question 16

Among the characteristics of technology is/are:

Accepted Answer

A)  technological progress is usually the result of intentional, costly activity. 
B)  technology is often nonrival. 
C)  technology is often nonexcludable. 
D)  All of the above. 
E)  None of the above. 
A)  technological progress is usually the result of intentional, costly activity. 
B)  technology is often nonrival. 
C)  technology is often nonexcludable. 
D)  All of the above. 
E)  None of the above.

Question 17

Central to Schumpeter's model of economic growth is:

Accepted Answer

A)  the entrepreneur. 
B)  an efficient government bureaucracy. 
C)  the inventor. 
D)  the working class. 
A)  the entrepreneur. 
B)  an efficient government bureaucracy. 
C)  the inventor. 
D)  the working class.

Question 18

An imperfectly competitive producer:

Accepted Answer

A)  has no say in the price of its product and is, essentially, a price taker. 
B)  faces a horizontal demand curve. 
C)  supplies its products up to the quantity where the marginal revenue from selling one more product is equal to the marginal cost of producing that last unit. 
D)  sets the price where the marginal revenue equals the average cost. 
A)  has no say in the price of its product and is, essentially, a price taker. 
B)  faces a horizontal demand curve. 
C)  supplies its products up to the quantity where the marginal revenue from selling one more product is equal to the marginal cost of producing that last unit. 
D)  sets the price where the marginal revenue equals the average cost.

Question 19

Population and economic growth are:

Accepted Answer

A)  directly related according to the Solow model. 
B)  inversely related according to Schumpeter's model. 
C)  directly related according to Schumpeter's R&D model. 
D)  Not related at all in any of the endogenous growth models. 
A)  directly related according to the Solow model. 
B)  inversely related according to Schumpeter's model. 
C)  directly related according to Schumpeter's R&D model. 
D)  Not related at all in any of the endogenous growth models.

Question 20

In the model of an imperfectly competitive market:

Accepted Answer

A)  the marginal revenue curve lies above the demand curve. 
B)  firms are price-takers who behave as if they are unable to affect the price. 
C)  producers supply additional output up to the point where marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above. 
A)  the marginal revenue curve lies above the demand curve. 
B)  firms are price-takers who behave as if they are unable to affect the price. 
C)  producers supply additional output up to the point where marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above.

Joseph Schumpeter is best known for his:

In his model of endogenous technological progress based on intentional, costly R&D activity, Paul Romer assumes that:

Among the institutions that are critical for economic growth, Schumpeter included:

Which of the following concepts is not found in the Schumpeterian R&D model:

In the R&D model of technological progress, the rate of technological progress is:

Joseph Schumpeter view of competition in the business market revolved around:

Joseph Schumpeter's concept of competition is:

According to Joseph Schumpeter:

The speed of technological progress is likely to:

How does a decline in β, the variable that represents the amount of resources needed to generate new technology, impact the Schumpeterian R&D model?

The models of endogenous technological progress usually predict that:

The present value of innovation curve (PVI) will shift up when:

The cost of innovation curve (CoI) in the Schumpeterian R&D model will shift up (to the left) when:

Which of the following are conclusions generated by all of the models of endogenous technological progress?

An imperfectly competitive producer:

Among the characteristics of technology is/are:

Central to Schumpeter's model of economic growth is:

An imperfectly competitive producer:

Population and economic growth are:

In the model of an imperfectly competitive market:

The Welfare Gains From Trade

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Overcoming Diminishing Returns: Technology As an Externality

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

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Exam 5: Technological Progress As Creative Destruction

Joseph Schumpeter is best known for his:

In his model of endogenous technological progress based on intentional, costly R&D activity, Paul Romer assumes that:

Among the institutions that are critical for economic growth, Schumpeter included:

Which of the following concepts is not found in the Schumpeterian R&D model:

In the R&D model of technological progress, the rate of technological progress is:

Joseph Schumpeter view of competition in the business market revolved around:

Joseph Schumpeter's concept of competition is:

According to Joseph Schumpeter:

The speed of technological progress is likely to:

How does a decline in β, the variable that represents the amount of resources needed to generate new technology, impact the Schumpeterian R&D model?

The models of endogenous technological progress usually predict that:

The present value of innovation curve (PVI) will shift up when:

The cost of innovation curve (CoI) in the Schumpeterian R&D model will shift up (to the left) when:

Which of the following are conclusions generated by all of the models of endogenous technological progress?

An imperfectly competitive producer:

Among the characteristics of technology is/are:

Central to Schumpeter's model of economic growth is:

An imperfectly competitive producer:

Population and economic growth are:

In the model of an imperfectly competitive market:

The Welfare Gains From Trade

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Overcoming Diminishing Returns: Technology As an Externality

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

Filters