Because firms can free ride on the research and development of other firms,
A) firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research.
B) firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research.
C) firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research.
D) firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research.
C
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When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of
a. Fixed-cost fallacy b. Sunk-cost fallacy c. Hidden-cost fallacy d. None of the above
The responsiveness of quantity demanded of a good to changes in its price is the
A. cross elasticity of demand. B. price elasticity of demand. C. quantity elasticity of price. D. income elasticity.
If the price of gasoline increases, what will be the impact in the market for public transportation?
A) The demand curve for public transportation shifts to the right. B) The quantity of public transportation demanded increases. C) The demand curve for public transportation shifts to the left. D) The quantity of public transportation demanded decreases.
Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as:
A. Rent-seeking B. Price discrimination C. X-efficiency D. Network effects