According to the New Growth Theory

question 229

Multiple Choice

According to the new growth theory

• A) knowledge is not subject to diminishing returns.
• B) the rate of technological progress is determined by chance.
• C) the labor demand curve does not shift rightward over time.
• D) the concept of a labor market is not necessary.

---

Definitions:

Valid Generalization

A conclusion drawn from specific instances that is logically sound and supported by evidence.

Purely Competitive Seller

A market participant in an industry where many sellers offer identical products, and no single seller can influence the market price.

MR = MC Rule

An economic principle stating that profit maximization for a firm occurs when its marginal revenue (MR) equals its marginal cost (MC).

Purely Competitive Seller

A seller in a perfectly competitive market where the product offered has no differentiation, and the seller is a price taker with no control over the market price.