Patents stimulate innovation by
a. providing incentives to incur research and development costs
b. guaranteed profits for those who innovate
c. prosecuting anyone who purchases the good protected by the patent
d. providing tax breaks to investors
e. increasing the interest rate on borrowed funds
A
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Which of the following statement is FALSE?
a) Imports and exports account for over one-half of the GDP of the Netherlands. b) Japan is less dependent on foreign trade than is the United States. c) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice, and corn crops. d) China is the leading exporting country, accounting for 12.1 percent of total world exports.
Suppose that in Colombia one unit of labor can produce either 8 tons of papayas or 2 tons of bananas and in Brazil one unit of labor can produce either 4 tons of papayas or 1 ton of bananas. Given this information, which of the following statements is true?
A. Columbia has a comparative advantage in producing papayas but not bananas. B. These countries would increase combined consumption if they specialized and traded. C. These countries cannot gain from trading. D. Columbia has a comparative advantage in producing papayas and bananas.
If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it ________
A) decreases the capacity of the sewage system B) does not change the capacity of the sewage system C) increases the capacity of the sewage system D) increases the sewerage charge that the residents pay
Many fast-food restaurants have signs on their cash registers that read, "Your meal is free if the cashier does not give you a receipt". What might be the purpose of such a sign? Hint: there is a moral hazard problem here
What will be an ideal response?