As a means of motivating research and development, a patent may stimulate either too much or too little research, relative to the socially optimal level
Indicate whether the statement is true or false
T When only a part of the consumer surplus gain may be appropriated by the discoverer, there may be too little research. When firms might gain at the expense of other sellers, even when consumers gain little, there can be too much research.
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Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. This would be expected to cause the price of Japanese goods in the U.S. economy to
A. decrease. B. change in a manner that cannot be determined without additional information. C. remain the same since domestic demand remains the same. D. increase.
Answer the following statements true (T) or false (F)
1. United States has had little success with the surplus aspect of balancing the budget over the period of a business cycle. 2. The full-employment balanced budget always shows a surplus. 3. A deficit budget adds to the national debt. 4. The United States will face bankruptcy if the national debt ever reaches a figure higher than its GDP. 5. The government’s ability to repay the national debt is governed only by the total assets of the economy.
Which one of the following will shift the Israeli consumption curve upward?
a. higher interest rates in Israel b. an increase in real assets in Israel c. expectations of future Israeli economic growth d. lower capacity utilization rates in Israel e. a tax increase in Israel
Suppose that steak is a normal good and vegetables are inferior goods. Using a carefully-labeled diagram, illustrate the income-consumption curve that would result from an increase in a consumer's income.
What will be an ideal response?