What is the economic role of a patent?
What will be an ideal response?
A patent grants the inventor the exclusive right to make, use, or sell an invention for 20 years. This gives the inventor property rights on the invention, which enables the inventor to profit from the invention. The number of inventions should be greater if people can profit from inventive activity, so patents help stimulate investment in new technology and increase economic growth.
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Consider a firm with constant marginal cost that behaves competitively. A horizontal merger lowers the firm's marginal cost and causes the firm to behave like a monopoly. How does the merger affect producer's surplus, consumers' surplus, and social gain? Explain.
What will be an ideal response?
Refer to the scenario above. Which of the following will happen if she sells it for $200, and the total cost incurred by her in making the dress was $150?
A) GDP will increase by $50. B) GDP will increase by $180. C) Trade surplus will increase by $200. D) GDP will remain unchanged. Sarah takes care of her son instead of sending him to a day care which charges $12,000 annually.
According to physicians, people should drink eight full glasses of water per day to maintain optimal health; it is now common knowledge. But people don't necessarily follow doctor's orders because
A) only they know what they need. B) people value other goods in addition to optimal health. C) we only really need a few ounces of water each day. D) nobody considers optimal health to be desirable.
Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1
Refer to Table 9.1. If the market price is $10, then for this firm to maximize profits it should produce ________ unit(s) of output.
A. zero B. one C. two D. three