Answer the following statement true (T) or false (F)
1) Innovation is the first discovery of a new product or production process; invention is the first
successful commercial introduction of the product or process.
2) Diffusion is the first successful commercial introduction of a product, the use of a new method,
or the creation of a new form of business enterprise.
3) Venture capital is another name for retained earnings.
4) The marginal cost to a firm of R&D expenditures is the market interest rate the firm must pay
to obtain the needed financing.
5) A firm's optimal amount of R&D occurs where the marginal benefit of this activity exceeds
marginal cost by the greatest amount.
1) F
2) F
3) F
4) T
5) F
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Elite Astin-Martin Cars offers its customers a fancy showroom and a knowledgeable sales force. If Astin-Martins Are Us opens an outlet nearby, offering cut rate prices and little service, then Elite Astin-Martin Cars will likely find
a. more customers attracted to buying Astin-Martins and its sales will increase. b. more customers visiting its showroom, but lower sales. c. fewer customers visiting its showroom and lower sales. d. fewer customers visiting its showroom but more of them making a purchase.
Advocates of floating rate suggested it is favorable for economies for all of the following reasons EXCEPT
A) it discourages attack from foreign exchange speculators because of the fact that exchange rate adjustment is immediate. B) it helps stabilize the shock effect on unemployment in case of economic changes such as fall in export demand. C) it automatically matches the domestic inflation with ongoing foreign inflation. D) it gives every country the opportunity to guide its own monetary conditions at home. E) it brings the LR exchange rate to the level predicted by PPP without government policy decisions.
Keynesians:
A. generally favor laissez-faire policies. B. believe that frictional unemployment does not exist. C. believe that all unemployment is cyclical unemployment. D. generally favor activist government policies.
Which of the following market structures would you expect to yield the greatest product variety?
A. Perfect competition B. Bertrand oligopoly C. Monopoly D. Monopolistic competition