If the government wants to encourage spending on research and development, it should
a. reduce patent protection so many individuals can use new products in their own research
b. shorten the number of years during which a developer has exclusive patent rights to market an invention
c. increase the number of years during which an inventor has exclusive patent rights to market an invention
d. raise tax rates on corporate profits to raise money for the research
e. encourage firms and households to spend money instead of saving it
C
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Government failure may occur die to:
a. short run focus of elected officials b. special-interest group influence c. difficulty is measuring the marginal social benefit and the marginal social cost of government spending d. all of the above
A toy manufacturer is experiencing quality problems on its assembly line. Every defective toy that leaves the factory costs the firm $20. The firm has decided to hire quality inspectors to catch defective toys before they leave the factory.
Given the above information, if each inspector is paid $100 a day, how many inspectors should the firm hire to minimize the total cost of defective toys?
A. 3 B. 4 C. 5 D. 6
You are asked to lend a friend $20,000 for a year. At the end of the year your friend agrees to pay you $21,000. The interest rate on this loan is
A. 4.50% B. 5.00%. C. 5.50%. D. indeterminate from this information.
If more insurance companies decide to cover part of the price of voluntary laser eye surgery and more doctors decide to enter the field of laser eye surgery, what will happen in the market for laser eye surgery as a result of these two factors?
A) Demand and supply will both increase. B) Demand will increase, but these two factors will not shift the supply curve. C) Supply will increase, but these two factors will not shift the demand curve. D) Demand will increase and supply will decrease.