The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How does the U.S. government correct for this apparent market failure?
The government assigns and protects the property rights of the producers of specific, technological knowledge through patents. The inventor will obtain much of the benefit of his invention. The U.S. government also subsidizes basic research in many different fields.
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Where large amounts of capital are used, the dominant form of business organization is the
A) corporation. B) partnership. C) proprietorship. D) partnership in manufacturing and the corporation in finance.
If the estimates of the coefficients of interest change substantially across specifications,
A) then this can be expected from sample variation. B) then you should change the scale of the variables to make the changes appear to be smaller. C) then this often provides evidence that the original specification had omitted variable bias. D) then choose the specification for which your coefficient of interest is most significant.
The substitution bias in the CPI refers to the failure of statisticians to:
A. take into account new products purchased by consumers. B. take into account improvements in goods and services. C. allow for the possibility that consumers switch from products whose prices are rising. D. allow for the possibility that consumers switch stores at which they shop.
Technological change:
A. does not reduce average total cost but does change production techniques. B. reduces average total cost by expanding plant size. C. reduces average total cost by changing production techniques. D. reduces average total cost without changing production techniques.