Government regulators sometimes set the price of a drug at its marginal cost of production without including a fair share of the global joint cost of research and development. Which of the following statements is true about this practice?
a. This behavior is highly unlikely because every country pays its fair share of the cost of research and development.
b. Setting drug prices at the marginal cost of production expands the market and guarantees that total drug spending covers all costs, including fixed development costs.
c. It assures consumers of the unlimited availability of the drug.
d. The described practice is almost impossible because development costs are easily divided among consumers and prices to reflect differences in the relative benefits each receives.
e. This practice is a classic example of free riding.
e. This practice is a classic example of free riding.
You might also like to view...
Refer to Figure 17-4. Which of the following is true at W0?
A) The substitution effect is larger than the income effect. B) The income effect and the substitution effect are equal. C) The income effect is larger than the substitution effect. D) The supply curve is positively sloped.
Multiperiod forecasting with multiple predictors
A) is the same as the iterated AR forecast method. B) can use the iterated VAR forecast method. C) will yield superior results when using the multiperiod regression forecast h periods into the future based on p lags of each Yt , rather than the iterated VAR forecast method. D) will always yield superior results using the iterated VAR since it takes all equations into account.
Which of the following is not an example of price discrimination?
a. IBM charges business users of its laser printer more than home users b. Intel offered faster and slower versions of a computer chip c. An amusement park charges the same admission fee to local residents and out-of-towners d. Adobe stripped some features from Photoshop to offer a cheaper version e. Holders of Nevada driver's licenses pay less to ride the Las Vegas monorail
In recent years, the national debt was about 120 percent of the U.S. GDP
a. True b. False Indicate whether the statement is true or false