Explain How Advances in Technology Are Critical to Sustaining Economic

question 228

Essay

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to illustrate how increases in capital per hour worked,without advances in technology,are not enough to sustain economic growth.

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Definitions:

Marginal Revenue

The increase in profit from selling an extra unit of a good or service.

Average Nightly Room Rate

A measure used in the hospitality industry to calculate the average price paid per room per night.

Monopolistic Competition

A marketplace setup where plenty of businesses distribute products that resemble each other but are not duplicates, allowing them a partial degree of marketplace power and the ability to individualize their offerings.

Pure Competition

A market structure characterized by a large number of small firms, homogenous products, and easy market entry and exit, leading to price takers rather than price makers.