What is the shape of the expected-rate-of-return curve as presented in this chapter? Why does it have this shape?
What will be an ideal response?
The curve is a down sloping linear line with the expected rate of return shown on the vertical axis and the amount of research and development expenditures shown on the horizontal axis. The curve indicates that there are fewer opportunities for research and development with high expected rates of return, and thus fewer expenditures, but there are more opportunities for research and development with lower expected rates of return, and thus more expenditures. The curve shows the expected rate of return, which is the marginal benefit of each dollar of expenditure on R&D.
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Consumer spending represents about what fraction of total spending in the economy?
a. one-fifth b. two-thirds c. one-third d. two-fifths e. three-fourths
As the price of land decreases along its demand curve, the relative price of land
a. increases because the prices of other resources have also decreased. b. decreases because the prices of other resources have also decreased. c. increases because the prices of other resources have increased. d. decreases because the prices of other resources are held constant. e. remains constant because the prices of other resources also increase.
Microeconomics approaches the study of economics from the viewpoint of:
a. inflation, unemployment, and economic growth. b. the federal government. c. individual economic units, such as consumers, firms, and units of government. d. the economy as a whole.
In any one year, the Social Security taxes collected by the government must necessarily equal the Social Security payments that the government makes
Indicate whether the statement is true or false