BioMed Pharmaceutical has held a patent on an important heart medication called Heartex, but the patent will expire in the coming year. After the patent expires, other firms can legally sell the same medication as a generic drug product
What will happens to the demand for Heartex and to the Lerner index for this product as the generic drugs enter the market? A) Demand becomes less elastic, Lerner index increases
B) Demand becomes less elastic, Lerner index declines
C) Demand becomes more elastic, Lerner index increases
D) Demand becomes more elastic, Lerner index declines
D
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Government can play a crucial role in promoting economic efficiency by
a. taxing income b. providing physical and institutional infrastructures c. establishing price ceilings to help certain buyers d. establishing price floors to help certain sellers e. creating barriers to market entry whenever there is a threat of excessive competition
Currently, China and India are growing much faster than the United States and Western Europe. This high rate of growth will eventually and naturally slow down in the future because:
a. China and India will exhaust their natural resources. b. Actually, there is no economic reason for China and India's growth rates to fall in the future. c. Current account surpluses will eventually cause capital flight from these nations which will lower the value of their currency and reduce their growth rates. d. Consumption will increase and crowd out investment spending. e. Diminishing returns will eventually set in.
Most economists attribute the growing income inequality in the United States to
A) trade. B) macroeconomic policies. C) technological change. D) changing values. E) taxes.
Open market operations are
A. the Federal Reserve's purchase and sale of existing U.S. government securities. B. the procedures of applying for loans at commercial banks. C. the procedures for approving loans at commercial banks. D. steps a bank must complete before it can invest in stocks on the open market.