Answer to Question #92371 in Economics for MarkDaniel Anton

Question

Question1.
State and explain one main similarity between a 'Big Push Model' and the ' O ring Model.'

Question 2.
State the main differences between a " Big Push Model" and the " O ring Model."

Answer 1

1) The one main similarity between a 'Big Push Model' and the ' O ring Model' is that tasks of production and all inputs must be executed proficiently together in order for any of them to be of high value.

2) A big push model uses the assumption of three indivisibilities that are responsible for external economies and thus justify the need for a big push, the O-ring development theory explains why rich countries produce more complicated products, have larger firms and much higher worker productivity than poor countries.