Question 1

All of the following are examples of technology sharing except

Accepted Answer

A)  technology trading. 
B)  cross licensing of patents. 
C)  research joint ventures. 
D)  applying for a patent. 
E)  firms in an industry pooling resources to pay for R&D to develop a process innovation. 
A)  technology trading. 
B)  cross licensing of patents. 
C)  research joint ventures. 
D)  applying for a patent. 
E)  firms in an industry pooling resources to pay for R&D to develop a process innovation.

Question 2

Basic research is research

Accepted Answer

A)  whose goal is to invent or improve particular products. 
B)  that seeks to come up with specific marketable inventions. 
C)  whose goal is to invent or improve a particular process. 
D)  that is not very complicated. 
E)  that seeks to provide scientific knowledge and general principles. 
A)  whose goal is to invent or improve particular products. 
B)  that seeks to come up with specific marketable inventions. 
C)  whose goal is to invent or improve a particular process. 
D)  that is not very complicated. 
E)  that seeks to provide scientific knowledge and general principles.

Question 3

In 2008, spending on research and innovation represented approximately 2.8 percent of total GDP.

Accepted Answer

A) True 
 B)False

Question 4

Which term refers to an arrangement that permits some economic variable to increase but prevents that variable from subsequently decreasing?

Accepted Answer

A)  Kink 
B)  Interdependence 
C)  Cartel 
D)  Ratchet 
E)  Collusion 
A)  Kink 
B)  Interdependence 
C)  Cartel 
D)  Ratchet 
E)  Collusion

Question 5

Capitalism is an economic system in which there is public ownership of the means of production and resource allocation is determined through markets.

Accepted Answer

A) True 
 B)False

Question 6

A firm will tend to follow competitors when they increase spending on R&D, but will not follow them when they decrease such spending.

Accepted Answer

A) True 
 B)False

Question 7

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

Accepted Answer

A) True 
 B)False

Question 8

Innovation tends to be an extremely competitive activity that allows few opportunities for firms to share information with one another.

Accepted Answer

A) True 
 B)False

Question 9

What is the difference between basic research and applied research? Which of these will firms have more incentive to invest in, and why?

Accepted Answer

Basic research is research that seeks to

Question 10

Spending on R&D among a group of firms is equally likely to increase or to decrease.

Accepted Answer

A) True 
 B)False

Question 11

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

Accepted Answer

A) True 
 B)False

Question 12

It required less labor time to buy a college education in 1995 than it did in 1965.

Accepted Answer

A) True 
 B)False

Question 13

Collaborative research is especially important in high-technology sectors because a single firm might not have the resources to develop a significant innovation.

Accepted Answer

A) True 
 B)False

Question 14

In their effort to contain the risks inherent in the innovation process, large business firms have tended to slant their efforts toward

Accepted Answer

A)  revolutionary breakthroughs. 
B)  disruptive innovations. 
C)  small incremental improvements. 
D)  maintaining status quo. 
A)  revolutionary breakthroughs. 
B)  disruptive innovations. 
C)  small incremental improvements. 
D)  maintaining status quo.

Question 15

A firm will generally believe that if it increases its spending on R&D its competitors will not follow, but if it decreases its spending they will follow.

Accepted Answer

A) True 
 B)False

Question 16

The unprecedented increase in living standards in the industrialized countries over the last two centuries is the result of

Accepted Answer

A)  growth in productivity of land. 
B)  growth in labor productivity. 
C)  growth in output. 
D)  population growth. 
E)  growth in government spending. 
A)  growth in productivity of land. 
B)  growth in labor productivity. 
C)  growth in output. 
D)  population growth. 
E)  growth in government spending.

Question 17

The Industrial Revolution refers to the period 1950-1970, which was characterized by rapid manufacturing sector growth in the United States.

Accepted Answer

A) True 
 B)False

Question 18

The presence of barriers to entry in innovation will ensure that profits from innovation are driven to zero.

Accepted Answer

A) True 
 B)False

Question 19

In the United States, the financing for innovation has been increasingly supplied by

Accepted Answer

A)  large oligopolistic enterprises. 
B)  independent inventors 
C)  newly founded entrepreneurial firms. 
D)  small enterprises. 
A)  large oligopolistic enterprises. 
B)  independent inventors 
C)  newly founded entrepreneurial firms. 
D)  small enterprises.

Question 20

Capitalism is a market economic system with

Accepted Answer

A)  most production processes controlled by the government. 
B)  most production processes controlled by private firms with minimal government control. 
C)  all production processes controlled by private firms. 
D)  all production processes controlled by the government. 
E)  most production processes controlled by the government, with some control by private firms. 
A)  most production processes controlled by the government. 
B)  most production processes controlled by private firms with minimal government control. 
C)  all production processes controlled by private firms. 
D)  all production processes controlled by the government. 
E)  most production processes controlled by the government, with some control by private firms.

Exam 16: The Market's Prime Achievement: Innovation and Growth

All of the following are examples of technology sharing except

Basic research is research

In 2008, spending on research and innovation represented approximately 2.8 percent of total GDP.

Which term refers to an arrangement that permits some economic variable to increase but prevents that variable from subsequently decreasing?

Capitalism is an economic system in which there is public ownership of the means of production and resource allocation is determined through markets.

A firm will tend to follow competitors when they increase spending on R&D, but will not follow them when they decrease such spending.

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

Innovation tends to be an extremely competitive activity that allows few opportunities for firms to share information with one another.

What is the difference between basic research and applied research? Which of these will firms have more incentive to invest in, and why?

Spending on R&D among a group of firms is equally likely to increase or to decrease.

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

It required less labor time to buy a college education in 1995 than it did in 1965.

Collaborative research is especially important in high-technology sectors because a single firm might not have the resources to develop a significant innovation.

In their effort to contain the risks inherent in the innovation process, large business firms have tended to slant their efforts toward

A firm will generally believe that if it increases its spending on R&D its competitors will not follow, but if it decreases its spending they will follow.

The unprecedented increase in living standards in the industrialized countries over the last two centuries is the result of

The Industrial Revolution refers to the period 1950-1970, which was characterized by rapid manufacturing sector growth in the United States.

The presence of barriers to entry in innovation will ensure that profits from innovation are driven to zero.

In the United States, the financing for innovation has been increasingly supplied by

Capitalism is a market economic system with

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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