Suppose that a firm's legal staff concludes that a new production process that the firm is developing is patentable. Graphically, this new information would shift the firm's expected-rate- of-return curve on R&D to the:
A. right and reduce its optimal amount of R&D.
B. right and increase its optimal amount of R&D.
C. left and increase its optimal amount of R&D.
D. left and reduce its optimal amount of R&D.
Answer: B
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When producing 8 units of output, average fixed cost is $12.50 and average variable cost is $81.25. Total cost at this output level is
A. $93.75. B. $97.78. C. $750. D. $880.
Which of the following describes a difference between allocative efficiency and productive efficiency in a perfectly competitive market?
A) Allocative efficiency is achieved only in the short run. Productive efficiency is achieved only in the long run. B) Allocative efficiency is achieved only in the long run. Productive efficiency is achieved in the short run and the long run. C) Allocative efficiency is achieved in the short run and the long run. Productive efficiency is achieved only in the long run. D) Allocative efficiency is achieved only in the long run. Productive efficiency is achieved only in the short run.
Which of the following would be a debit in the U.S. balance of payments?
a. the purchase of a Japanese car by an American b. the purchase of air service from a U.S. airline by a Japanese traveler c. a short-term loan extended to a Japanese manufacturer by a U.S. bank d. the purchase of U.S. grain by a Japanese bakery
Gross domestic product is a measure of both
a. the market value of a nation's capital assets (physical capital) and the costs that were incurred producing those assets. b. the expenditures on and sales revenues derived from all goods and services exchanged during a period. c. the market value of the output produced during a period and the cost of producing that output. d. the asset holdings of people and the happiness that they derived from the ownership of those assets.