Why do firms spend money on costly innovation?
a. Competitive markets leave firms no choice but to innovate.
b. Innovation is a low-risk activity.
c. Innovation always results in higher profits for firms.
d. Innovation is usually profitable because the majority of innovations reach the market place.
e. Because innovation is beneficial for society and firms are motivated to act in ways that are beneficial for society.
a
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
If, as a consumer, Jeannine is very sensitive to changes in the price of pineapples,
A) her demand is price elastic. B) her demand is price inelastic. C) her supply is price elastic. D) her supply is price inelastic.
As an economy moves from point to point along its production possibilities curve, which one of the following variables changes?
A) the total amount of resources employed B) the level of technology C) the time frame under consideration D) the amount of each good or service produced
Which of the following are factors of production?
A. Implicit and explicit costs. B. Productivity. C. Land, labor, capital, and entrepreneurship. D. Output in a production function.