A patent is a government-imposed entry barrier because
A) it is a key input owned by the firm that is granted the patent.
B) it allows a firm to achieve economies of scale.
C) it gives a firm the exclusive right to a new product for a period of 20 years from the date the product is invented.
D) it limits the quantity of a good that can be imported into a country.
C
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Kedran is indifferent between option A, which gives her $10,000 for sure, and option B, which gives her $5,000 with probability 0.4 or $15,000 with probability 0.6. Kedran's cost of risk for option B is
A) zero. B) $1,000. C) $5,000. D) $10,000.
Inflation is measured
A) as the percentage change in the consumer price index. B) as the percentage change in real GDP. C) using the level of real GDP. D) using the level of the consumer price index.
According to the permanent income hypothesis, taxpayers react to a one-time tax rebate
A) by spending all of the tax rebate. B) by spending more than the amount of the tax rebate. C) by saving half of the tax rebate and spending the rest. D) by saving all of the tax rebate.
If disposable income rises from $15,000 to $20,000 and the marginal propensity to consume equals 0.9, then saving must increase by $500
a. True b. False Indicate whether the statement is true or false