The merits of a patent system include:
A. the patent system gives firms strong incentives to take the risk of substantial research and development costs.
B. the patent system may precipitate the development of new products.
C. granting monopoly power through a patent may be beneficial from society's perspective.
D. All of these.
Answer: D
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Pre-commitment is:
A. a solution for dynamic inconsistency. B. a choice that increases the number of future options. C. a way to force "bad" choices by removing future good options. D. All of these are true about pre-commitment.
In 2009, the United States had its largest peacetime deficit. How much did the federal government spend over its revenue in that year?
a. $582 trillion b. $1.4 billion c. $1.4 trillion d. $582 billion
Movement along the demand curve means that the demand schedule ________ and the price ________.
A. changes; stays the same B. changes; also changes C. stays the same; also stays the same D. stays the same; changes
An informal understanding about the quality of product components supplied is a key to the relationship between most companies and their suppliers. This is a good example of
A. an adverse selection problem. B. a principal-agent conflict resolution. C. an explicit contract. D. an implicit contract.