At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why
Once someone comes up with an idea it is often easy for others to take advantage of it so that the idea becomes part of a society's knowledge. So, knowledge is frequently a public good. Without patents an inventor's reward for research and development of a good idea would be smaller. So, patents increase the incentives for firms and individuals to engage in research. The negative consequences of temporarily restricting the use of new ideas with patents is outweighed by the increase in new ideas that patents induce.
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What costs associated with the new auto-emission standards arise from decisions made in self-interest and in the social interest?
What will be an ideal response?
In the United States, the federal income tax is an example of a
A) progressive tax. B) regressive tax. C) flat tax. D) proportional tax.
Explain the ways in which the government can persuade private businesses to invest more in order to speed up the process of capital formation?
Inventions like gunpowder and the wheelbarrow were created by the Chinese hundreds of years ago. The fact that such items were not put to productive use was caused primarily by a lack of ____.
A. available financial capital B. incentives for entrepreneurship C. an adequate price system D. ingenuity