One reason patent protection is vitally important to pharmaceutical firms is
A) successful new drugs are not profitable. If firms are not granted patents many would go out of business and health care would be severely diminished.
B) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process.
C) the high salaries pharmaceutical firms pay to scientists and doctors make their labor costs higher than for any other business. Profits from patents are needed to pay these labor costs.
D) that taxes on profits from drugs are very high; profits from patent protection enable firms to pay these taxes.
B
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In analyzing the operation of a firm, an economist assumes the firm wants to
A) maximize total sales. B) maximize total revenue. C) maximize total production. D) maximize total profits.
Which of the following is false?
a. The money supply times velocity equals the price level times real GDP b. If individuals are writing lots of checks on their checking accounts and spending currency as fast as they receive it, velocity will tend to be high. c. The magnitude of velocity does not depend on the definition of money that is used. d. Velocity equals nominal GDP divided by the money supply.
Given a linear demand function of the form QXd = 100 - 0.5PX, find the inverse linear demand function.
A. PX = 200 - 2QX. B. PX = 100 - 0.5QX. C. PX = 100QX - 0.5PX. D. PX = 100 - 2QX.
Recall the Application about the response of bike messengers in Zurich to a change in wages to answer the following question(s).Recall the Application. A study of the messengers in Zurich showed that as the messengers' revenue share increased from 40% to 50%, the bike messengers took more shifts but pedaled slower. If the increase in the revenue is similar to a wage increase, then the increase in the shifts taken is reflective of:
A. the income effect. B. the substitution effect. C. neither the income nor the substitution effect. D. both the income and the substitution effect.