Exam 15: Technology, RD, and Efficiency

A) It is more or less equally distributed between innovation, invention, and basic research.
B) Well over half is dedicated to innovation and imitation.
C) The largest share is for basic research, as it provides the foundation, followed by invention and then innovation.
D) The majority is spent on applied research.

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A) patents.
B) copyrights and trademarks.
C) brand-name recognition.
D) rapid diffusion.

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A) monopolistic competition
B) pure competition
C) pure monopoly
D) oligopoly

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A) profitable firms are bought out by larger firms.
B) capitalism would create wealth, but government would destroy it.
C) the creation of new products would destroy the market for existing products.
D) invention is a creative process, but most ideas are destroyed when entrepreneurs develop and market products.

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A) the formation of Imation by the 3Com Corporation
B) the founding of Apple by Jobs and Wozniak
C) the buyout of McCaw Communications by AT&T
D) the sale of a license by IBM to Dell computers

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A) interest-rate cost-of-funds curve would be a vertical line.
B) interest-rate cost-of-funds curve would slope downward.
C) expected-rate-of-return curve would slope downward.
D) expected-rate-of-return curve would be a horizontal line.

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A) invention, duplication, and diffusion.
B) duplication, innovation, and diversity.
C) invention, innovation, and diffusion.
D) necessity, invention, and solution.

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A) movement from a point inside a production possibilities curve to a point on the curve.
B) movement along a production possibilities curve.
C) outward shift of a production possibilities curve.
D) inward shift of a production possibilities curve.

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A) MC = 5 percent; MB = 9 percent
B) MC = 9 percent; MB = 9 percent
C) MC = 9 percent; MB = 13 percent
D) MC = 5 percent; MB = 5 percent

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A) Google
B) Starbucks
C) Apple
D) PayPal

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A) is rooted in the independent advance of science, an element largely external to the market system.
B) is rarely carried out by oligopolists or pure monopolists.
C) is an internal element of capitalism, occurring in response to profit incentives.
D) necessarily destroys existing monopoly power.

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In the short run, technology and plant a...

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A) the scientific character of its industry and the number of technological opportunities available
B) the size of the industry concentration ratio-the lower the ratio, the greater the firm's technological progressiveness
C) the Herfindahl index in the firm's industry-the higher the index value, the greater the firm's technological progressiveness
D) the amount of retained earnings in the industry

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A) It enhances both productive and allocative efficiency in the society.
B) It can increase monopoly power through, for example, patents.
C) It can eventually destroy old existing monopolies.
D) It progresses automatically and inevitably.

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A) decreasing allocative efficiency.
B) increasing allocative efficiency.
C) decreasing productive efficiency.
D) increasing productive efficiency.

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A) an increase in the average total cost of production.
B) less need for legal protection for the product.
C) the opportunity to be bought out for a profit.
D) the ability to use the fast-second strategy.

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