Question

In the context of endogenous growth theory, the Nobel laureate Paul Romer emphasized that “ideas” are

• A. non-rival
• B. rival with medium degree of excludability
• C. rival with high degree of excludability
• D. rival with low degree of excludability

Hint:

Memory hook: \textbf{Ideas spread without being spent}—that’s non-rivalry; excludability depends on institutions like patents.

Answer 1

The Correct Option is A

Step 1: Romer’s point. In Romer’s endogenous growth model, ideas/knowledge are non-rival: one firm’s or person’s use does not reduce others’ ability to use the same idea. They can be {partially excludable} (e.g., patents), but the core property is non-rivalry, which underlies increasing returns and sustained growth.
Step 2: Eliminate others. Options (B)-(D) describe {rival} goods, which contradict Romer’s characterization.
Final Answer: (A) non-rival