Week 2 DQ

Respond to the following in a minimum of 175 words:

 Innovation and physical capital are 2 of the 4 factors of production. Discuss some
specific ways that 1 of the following laws increased the productivity of 1 or both of these
factors of production:
o 1862 Pacific Railway Act
o 1956 Federal Aid Highway Act
o 1946 Federal Airport Act
 What other examples of economic concentration can you share?
 What are the risks and advantages to economic concentration?
 How has economic concentration influenced your industry?

m
er as
The 1956 Federal Aid Highway Act increased the productivity of innovation and physical capital.

co
President Dwight D. Eisenhower knew the importance the continental highway system could

eH w
play from his experience of the Autobahns in Germany as a soldier. Ironically, he was in the

o.
Army’s first transcontinental truck convoy in 1919 and described the trip “dramatized the need
rs e
for better highways” as the difficult trip took two months (Ammon et. Al, 2017). A difficult two
ou urc
month trip is a huge barrier to rapidly acquiring physical capital in response to market demands.
The long-view economic implications were immense. The process of the construction “spurred
research and development among equipment manufacturers. Steady investment in existing
o

technologies had yielded long-term advances in power, capacity, and economy that quite literally
aC s

helped pave the way for new roadway infrastructure (Ammon et. Al, 2017).
vi y re

Examples of economic concentration is the almost monopoly sized firms that hold so much of
ed d

the market they squeeze out competition. This may be seen in markets from cat food to airline
ar stu

companies, as well as the obvious tech giants. The risks to economic concentrations are
unscrupulous actions of executives at the cost of the workers. “For example, US corporate
executives made sure that the vast majority of the benefits from the tax cut went into dividends
is

and stock buybacks, which exceeded a record-breaking $1.1 trillion in 2018. Buybacks raised
share prices and boosted the earnings-per-share ratio, on which many executives’ compensation
Th

is based” (Stiglitz, 2019).

sh

Economic concentration in my industry has created an imperfect competitive market. This is

influenced by an oligopoly. The childcare industry in Northern Virginia has very large county
subsidized firms and a few private firms. They have been able to squeeze out the competition by
possessing physical capital startups can’t acquire such as school space, facility size, experienced
labor, or equipment.

This study source was downloaded by 100000797176612 from CourseHero.com on 07-05-2021 17:14:27 GMT -05:00

https://www.coursehero.com/file/78775721/Week-2-DQdocx/
 References

Ammon, F., Francesca Russello. University of Pennsylvania. The Long Road. (2017, April 14).
Retrieved January 22, 2021, from https://millercenter.org/issues-policy/economics/the-
long-road

Stiglitz, Joseph E. March 12, 2019. Columbia Business School Ideas and Insights. Market
Concentration Is Threatening the U.S. Economy. Retrieve January 22, 2021, from
https://www8.gsb.columbia.edu/articles/chazen-global-insights/market-concentration-

m
er as
threatening-us-economy

co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
is
Th
sh

This study source was downloaded by 100000797176612 from CourseHero.com on 07-05-2021 17:14:27 GMT -05:00

https://www.coursehero.com/file/78775721/Week-2-DQdocx/
Powered by TCPDF (www.tcpdf.org)