When the government grants an inventor a patent
A. the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others.
B. the protection of a current invention would increase spending on R&D.
C. he has the exclusive right to make, sell or use his invention for 5 years.
D. the patent holder is guaranteed a profit on his invention.
Answer: B
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When the Federal Reserve sells a government security to a commercial bank
A) the cash reserves of the commercial bank decrease. B) the net worth of the commercial bank increases. C) the loans of the commercial bank will increase. D) the balance sheet of the commercial bank is thrown off balance.
Appendix: Common value auctions with open bidding necessarily entail
a. asymmetric information b. ascending prices c. more than two bidders d. amendment of bids e. sealed final offers.
Other things being equal, a fall in the price of orange juice will decrease the quantity supplied
a. True b. False Indicate whether the statement is true or false
You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. The profit-maximizing output for your firm is:
A. 45. B. 10. C. 4/5. D. 5.