Microeconomics of Technological Progress

The 'invisible hand' suggests that individual self-interest in a market leads to societal well-being.

Markets must be perfectly competitive and information must be exogenous.

Schumpeter argued that monopoly could be beneficial for innovation as it provides the financial support needed for research and development.

<p>They assumed that the state of technology was fixed and exogenous, disregarding the role of innovation.</p> Signup and view all the answers

<p>Markets are presumed to be inefficient in both the level and pattern of innovation.</p> Signup and view all the answers

<p>An economy's innovation system supports technological progress and learning by facilitating the flow of ideas from basic research to applied research, where ideas are refined and implemented.</p> Signup and view all the answers

<p>Competition is often not seen as fully conducive to innovation, as market structures may not be fully competitive, limiting the interplay between competition and innovation.</p> Signup and view all the answers

<p>Trade barriers can have both positive and negative impacts on economic growth; certain restrictions may be desirable if they foster a more conducive environment for innovation.</p> Signup and view all the answers

<p>Understanding learning processes is important because they significantly affect the pace of innovation, which is central to economic growth.</p> Signup and view all the answers

<p>Age structure can affect lifelong learning by influencing the availability of diverse experiences and perspectives, which can enhance innovation.</p> Signup and view all the answers

<p>Knowledge accessibility can be influenced by the dissemination of ideas, education systems, and collaboration among firms, which all facilitate learning.</p> Signup and view all the answers

<p>Applied research builds on basic research findings to refine and develop practical applications, driving technological innovation.</p> Signup and view all the answers

<p>Increased competition often leads to less innovation and learning due to the dominance of many small firms.</p> Signup and view all the answers

<p>The government plays an important role in shaping an innovative economy by implementing policies to enhance learning and innovation.</p> Signup and view all the answers

<p>Subsidies can lead to higher rates of growth and long-term learning benefits, outweighing short-term allocative distortions.</p> Signup and view all the answers

<p>Schumpeter believed monopolies would be temporary and stimulate innovation, whereas the analysis suggests they may be more persistent and less innovative.</p> Signup and view all the answers

<p>Welfare outcomes are ambiguous and depend on the relative impacts of learning elasticities and discount rates in respective market structures.</p> Signup and view all the answers

<p>The infant-economy argument suggests that protecting emerging sectors can nurture industrial growth and innovation.</p> Signup and view all the answers

<p>The analysis implies that higher market concentration may foster greater innovation compared to highly competitive markets.</p> Signup and view all the answers

<p>Access to knowledge in competitive markets is often limited, which may negatively impact opportunities for lifelong learning.</p> Signup and view all the answers

<p>A closed economy limits exposure to international markets, which may restrict learning, whereas an open economy can enhance innovation through competition and knowledge exchange.</p> Signup and view all the answers

<p>Governments face the challenge of balancing competition and monopoly power while ensuring that market conditions promote innovation and fair access.</p> Signup and view all the answers