According to Schumpeter, why don't competitive firms innovate?
Because competitive firms earn zero economic profit in the long run, they don't have the resources
necessary to fund innovation and experimentation. Also, if it tries and fails, the loss will drive it out of the
market.
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Use the following graph for a profit-maximizing pure monopoly to answer the next question.
At equilibrium, the firm will be generating ________.
A. a loss B. a normal profit C. an economic profit D. a profit that cannot be determined from the given graph
A restriction on imports is likely to reduce further restrictions on trade
Indicate whether the statement is true or false
An example of government investment in physical capital to increase business productivity is:
A. roadways. B. bridges. C. sewer systems. D. All of these are examples of ways governments can increase productivity.
According to the Federal Reserve there is $750 billion in currency in the hands of the public. What percent does the U.S. Treasury estimate is held outside the United States?
A. 20-25% B. 30-40% C. 50-67% D. 67-75%