New growth theory suggests that the accumulation of knowledge capital can be slowed because knowledge is both nonrival and nonecludable. How does the federal government intervene in the market to increase the amount of knowledge capital?
A. Public education
B. Patents
C. Subsidies
D. All of the above
E. A and B only
Answer: D. All of the above
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Jason spends all afternoon baking a cake. When it comes out of the oven, it's burnt and sunk in the middle. Jason thinks about all the time he invested in making it and decides he'll spend more time frosting it and eat it anyway, even though it tastes pretty terrible. Jason's decision to continue to decorate and eat the cake is a good example of:
A. someone focusing on sunk costs. B. someone ignoring sunk costs. C. someone thinking marginally. D. someone weighing the opportunity costs of frosting and eating the cake and the benefits of doing so.
Why do most large firms incorporate rather than operate as sole proprietorships or partnerships?
There is no general agreement among economists regarding the sources of the U.S. productivity slowdown that occurred between 1973 and 1995.
Answer the following statement true (T) or false (F)
The dilemma in a prisoner's dilemma is that:
A. the outcome is random, so players are uncertain about which strategy to play. B. the players would be better off if they both played a dominated strategy. C. only one player has a dominant strategy, but the other player is uncertain about what to do. D. the players may be trapped in a game they don't know how to play.