Firms free ride on the research and development of other firms when they
A) buy a firm's newly developed product, and then give it away to consumers.
B) choose a level of research and development that is inefficiently high.
C) license a new technology from a firm that developed the new technology.
D) use knowledge other firms have developed without paying for that knowledge.
D
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If the economy experiences an unanticipated demand shock and households and firms have rational expectations, there is
A) no trade-off between unemployment and inflation in either the short run or the long run. B) a trade-off between unemployment and inflation in the long run, but not in the short run. C) a trade-off between unemployment and inflation in the short run, but not in the long run. D) a trade-off between unemployment and inflation in both the short run and the long run.
Refer to the above figure. The profit maximizing quantity for this firm is
A) zero. B) Q1. C) Q2. D) Q3.
Other things equal, an increase in aggregate demand will result in:
a. an economic expansion. b. higher unemployment and a lower equilibrium price level. c. an economic recession. d. a decrease in equilibrium real GDP and an increase in the equilibrium price level. e. a decrease in the overall economic welfare.
The demand curve for funds is downward sloping because
a. the value of the MRP in terms of today's money shrinks as the interest rate rises. b. future returns must be discounted more when the interest rate rises. c. as the interest rate rises, more and more investments become unprofitable. d. All of the above are correct.