The economic justification for public subsidies to university research is based on
a. the value of this research to the university.
b. the higher salaries graduate students earn as a result of working with professors involved in research.
c. the external benefits of research and development to, in particular, high rates of economic growth.
d. higher incomes earned by those who provide services to university researchers (equipment, supplies, etc.).
c
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Where Y is GDP, C is consumption, I is investment, G is government purchases, T is net taxes, and there is no international trade, public saving equals:
A. Y - T - C. B. T - G. C. Y +T - G. D. Y - C - T.
Public goods are
A) under provided by the private market because the marginal cost of production is too high. B) under provided by the private market because the marginal benefits of consumption are too low. C) under provided by the private market because people's willingness to pay for the good is less than the marginal benefit of the good. D) over provided by the private market because the marginal benefits of consumption are too high.
The price effect refers to how changes in
A) price affect real income. B) price affect the quantity of a good consumed. C) income affect prices. D) preference affect prices.
Which of the following characteristics does perfect competition share with monopolistic competition?
a. price-taking firms b. zero long-run economic profit c. homogeneous product d. some barriers to entry e. economies of scale in production