Explain and give examples of invention. What does government do to protect it?
What will be an ideal response?
Invention is the most basic part of technological advance and involves the discovery of a product or process. It involves the use of imagination, problem solving, and experimentation, and provides the first proof that the new product will work. Examples of different inventions include the first prototype of the light bulb, telephone, radio, television, or personal computer. Governments encourage invention by providing the inventor with a patent, which is an exclusive right to sell a product for a period of time (now 20 years from the time of application).
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Assume that there is a 25% reserve requirement and that the Federal Reserve buys $200 million worth of government securities. If the securities are purchased from the public, then this action has the potential to increase bank lending by a maximum of ________.
A. $800 million, and also by $800 million if the securities are purchased directly from commercial banks B. $600 million, and also by $600 million if the securities are purchased directly from commercial banks C. $800 million, but only by $600 million if the securities are purchased directly from commercial banks D. $600 million, but by $800 million if the securities are purchased directly from commercial banks
Define trade surplus and trade deficit
What will be an ideal response?
A corrective tax can improve upon the misallocation of resources resulting from an externality _____
a. only if the externality is positive b. only if it is easy to quantify the external damage c. transactions costs are low d. transactions costs are zero
Jordan and Jennifer are musicians in New Orleans. Ezra is a musician thinking about moving to New Orleans. Which of the following statements is correct?
a. The wage needed to keep Jordan and Jennifer in the New Orleans music industry in the long run will be lower than the wage needed to keep them in the industry in the short run. b. The costs of entering the New Orleans music industry are sunk costs for Jordan, Jennifer, and Ezra. c. The costs of entering the New Orleans music industry are sunk costs for Ezra but not for Jordan and Jennifer. d. The wage needed to induce Ezra to enter the New Orleans music industry will be lower than the wage needed to keep him in the industry after he enters. e. The costs of entering the music industry in New Orleans are sunk costs for Jordan and Jennifer, but not for Ezra.