Ordinarily, governments attempt to promote competition in markets. Why do governments use patents to block entry into some markets when this prohibits competition?
A) Patents encourage firms to spend money on research necessary to create new products.
B) Politicians sometimes succumb to pressure from lobbyists to grant favors to businesses for political reasons.
C) Patents are an important source of government revenue.
D) Patents are justified because they are an important means for creating network externalities.
Answer: A
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What is an attempt to monopolize an industry?
What will be an ideal response?
If the tax cost of this proposed project is $300 per person, a majority vote will:
Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community. No vote trading is allowed.
A. defeat this project and resources will be underallocated to it.
B. pass this project and resources will be allocated efficiently.
C. pass this project and resources will be underallocated to it.
D. defeat this project and resources will be overallocated to it.
Refer to Figure 5-13. The market equilibrium price of gasoline is ________ per gallon
A) $3.00 B) $3.75 C) $4.25 D) $5.00
Empirical evidence shows that the quantity theory of money is a good theory of inflation
A) in the long run, but not in the short run. B) in the short run, but not in the longrun. C) in both the long run and the short run. D) not in either the long run nor the short run.