-In the Romer Model in Figure 6

question 22

Multiple Choice

-In the Romer model in Figure 6.1,at time t0,a change in the growth rate of per capita output can be explained by:

• A)an increase in the ideas efficiency parameter.
• B)an increase in the population.
• C)an increase in the research share.
• D)an increase in the saving rate.
• E)a and b

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Definitions:

Allocatively Inefficient

A situation where resources are not distributed in a way that maximizes the benefits to society, often leading to a loss of economic welfare.

Marginal Benefit

The additional satisfaction or utility gained from receiving or consuming one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product or service, a key concept in economic theory for decision-making and pricing.

Monopolists

Entities that are the sole providers of a product or service in a market, allowing them to control prices and output levels.