Explain how process innovation reduces cost and increases profits. How does this innovation affect the firm’s total product curve and average cost curve?
What will be an ideal response?
Process innovation, the introduction of better ways to make products, is another means of increasing profit and obtaining a positive return on R&D expenditures. For example, a firm may develop a better way of making a product that requires fewer steps or makes better use of labor resources. This innovation results in a shift upward in the firm’s total product curve and a shift downward in the firm’s average total cost curve that increases the firm’s profit.
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Foreign aid often becomes a source of discretionary funds that benefit poor people in developing countries and not the countries' leaders
a. True b. False
A surplus occurs when price is higher than the market equilibrium
a. True b. False Indicate whether the statement is true or false
Unemployment typically ________ during a recession.
A. only exist B. remains constant C. falls D. rises
The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHzTotal BenefitMarginal BenefitTotal CostMarginal Costs2.0$1,000 $900 2.5$1,400 $1003.0 $300$1,200 3.5$1,900 $1,500 4.0$2,000 $400 The total benefit of a 3.0GHz computer is:
A. $900. B. $1,700. C. $1,650. D. $300.