Question 1

We know with certainty that a consumer will buy a newly introduced product rather than an existing product when the:

Accepted Answer

A)  MU/P of the new product exceeds the MU/P of the existing product. 
B)  price of the new product is less than the price of the existing product. 
C)  MU of the new product is more than the MU of the existing product. 
D)  law of diminishing marginal utility applies to the existing product. 
A)  MU/P of the new product exceeds the MU/P of the existing product. 
B)  price of the new product is less than the price of the existing product. 
C)  MU of the new product is more than the MU of the existing product. 
D)  law of diminishing marginal utility applies to the existing product.

Question 2

When economists view technological change as internal to the economy,they mean that it:

Accepted Answer

A)  occurs randomly. 
B)  occurs accidentally. 
C)  arises deliberately from the profit motive and competition. 
D)  arises mainly from government subsidies. 
A)  occurs randomly. 
B)  occurs accidentally. 
C)  arises deliberately from the profit motive and competition. 
D)  arises mainly from government subsidies.

Question 3

In economists' models,technological advance occurs in:

Accepted Answer

A)  the very long run. 
B)  either the short run,long run,or very long run. 
C)  manufacturing industries but not in service industries. 
D)  pure competition but not in monopolistic competition,oligopoly,and pure monopoly. 
A)  the very long run. 
B)  either the short run,long run,or very long run. 
C)  manufacturing industries but not in service industries. 
D)  pure competition but not in monopolistic competition,oligopoly,and pure monopoly.

Question 4

Creative destruction is:

Accepted Answer

A)  the process by which large firms buy up small firms. 
B)  the process by which new firms and new products replace existing dominant firms and products. 
C)  a term coined many years ago by Adam Smith. 
D)  applicable to planned economies but not to market economies. 
A)  the process by which large firms buy up small firms. 
B)  the process by which new firms and new products replace existing dominant firms and products. 
C)  a term coined many years ago by Adam Smith. 
D)  applicable to planned economies but not to market economies.

Question 5

Suppose firm X implements a new method for extracting copper from copper-bearing ore.This is an example of:

Accepted Answer

A)  product innovation. 
B)  process innovation. 
C)  economics of scale. 
D)  the inverted-U theory. 
A)  product innovation. 
B)  process innovation. 
C)  economics of scale. 
D)  the inverted-U theory.

Question 6

The process by which new firms and new products replace existing dominant firms and products is called:

Accepted Answer

A)  monopolistic competition. 
B)  the inverted-U process. 
C)  process innovation. 
D)  creative destruction. 
A)  monopolistic competition. 
B)  the inverted-U process. 
C)  process innovation. 
D)  creative destruction.

Question 7

Venture capital is another name for retained earnings.

Accepted Answer

A) True 
 B)False

Question 8

Process innovation is represented as a downward shift in a firm's total product curve and its average total cost curve.

Accepted Answer

A) True 
 B)False

Question 9

Which among the following is the strongest determinant of an industry's technological progressiveness?

Accepted Answer

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. 
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.

Question 10

In the inverted-U theory of R&D:

Accepted Answer

A)  process innovation and product innovation are inversely related. 
B)  technological change is inversely related to scientific discovery. 
C)  R&D expenditures rise continuously as a percentage of firms' sales as industry concentration rises. 
D)  R&D expenditures first rise as a percentage of firms' sales as industry concentration increases,but then fall as higher industry concentration occurs. 
A)  process innovation and product innovation are inversely related. 
B)  technological change is inversely related to scientific discovery. 
C)  R&D expenditures rise continuously as a percentage of firms' sales as industry concentration rises. 
D)  R&D expenditures first rise as a percentage of firms' sales as industry concentration increases,but then fall as higher industry concentration occurs.

Question 11

Consumer's income = $12 $$\begin{array}{l}
\begin{array} { c c c c } 
\begin{array} { c } 
\
\text { Units of } \
\text { Product }\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, X } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, Y } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\text { Marginal Utility, }\
\text { New Product, Z } \
( \text { Price } = \$ 1 )\
\hline
\end{array} \
 \text { First } & 12 & 16 & 20 \
\text { Second } & 10 & 14 & 18 \
\text { Third } & 8 & 12 & 16 \
\text { Fourth } & 6 & 10 & 14 \
\text { Fifth } & 4 & 8 & 12 \
\text { Sixth } & 2 & 6 & 10 \
\text { Seventh } & 0 & 4 & 8
\end{array}
\end{array}$$ Refer to the data.In equilibrium,the introduction of new product Z has increased this consumer's total utility by:

Accepted Answer

A)  42 utils. 
B)  54 utils. 
C)  60 utils. 
D)  66 utils. 
A)  42 utils. 
B)  54 utils. 
C)  60 utils. 
D)  66 utils.

Question 12

The marginal benefit to a firm from its R&D expenditures is depicted by its:

Accepted Answer

A)  interest-rate cost-of-funds curve. 
B)  expected-rate-of-return curve. 
C)  venture capital acquisition curve. 
D)  retained earnings pay-out curve. 
A)  interest-rate cost-of-funds curve. 
B)  expected-rate-of-return curve. 
C)  venture capital acquisition curve. 
D)  retained earnings pay-out curve.

Question 13

Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings?

Accepted Answer

A)  Oligopolists and pure monopolists. 
B)  Pure competitors and pure monopolists. 
C)  Pure competitors and monopolistic competitors. 
D)  Monopolistic competitors and pure monopolists. 
A)  Oligopolists and pure monopolists. 
B)  Pure competitors and pure monopolists. 
C)  Pure competitors and monopolistic competitors. 
D)  Monopolistic competitors and pure monopolists.

Question 14

Suppose that Marlen Fisher has legal protection against anyone producing and selling a fishing lure identical to his unique-action "MarFish" lure,whatever the competitor might name the lure.This legal protection is most likely to be a:

Accepted Answer

A)  trademark. 
B)  restraining order. 
C)  patent. 
D)  copyright. 
A)  trademark. 
B)  restraining order. 
C)  patent. 
D)  copyright.

Question 15

(Consider This)The central idea illustrated by the vignette on "catgut" used as violin strings is:

Accepted Answer

A)  patent rights. 
B)  research and development activity. 
C)  derived demand. 
D)  trade secrets. 
A)  patent rights. 
B)  research and development activity. 
C)  derived demand. 
D)  trade secrets.

Question 16

Broadly defined,technological advance:

Accepted Answer

A)  can occur in the short run,long run,or very long run. 
B)  comprises new and improved goods and services and/or new and improved ways of producing or distributing them. 
C)  includes invention but not innovation or diffusion. 
D)  includes product innovation but not process innovation. 
A)  can occur in the short run,long run,or very long run. 
B)  comprises new and improved goods and services and/or new and improved ways of producing or distributing them. 
C)  includes invention but not innovation or diffusion. 
D)  includes product innovation but not process innovation.

Question 17

The corporate decision on type and level of R&D activity is difficult because:

Accepted Answer

A)  the interest-rate cost of funds is difficult to estimate. 
B)  much of corporate R&D is based on the pursuit of science,not on the profit motive. 
C)  expected returns lie in the future and are highly uncertain. 
D)  total returns and marginal returns greatly diverge. 
A)  the interest-rate cost of funds is difficult to estimate. 
B)  much of corporate R&D is based on the pursuit of science,not on the profit motive. 
C)  expected returns lie in the future and are highly uncertain. 
D)  total returns and marginal returns greatly diverge.

Question 18

The spread of innovation through imitation refers to:

Accepted Answer

A)  invention. 
B)  diffusion. 
C)  duplication. 
D)  diversification. 
A)  invention. 
B)  diffusion. 
C)  duplication. 
D)  diversification.

Question 19

Consumer's income = $12 $$\begin{array}{l}
\begin{array} { c c c c } 
\begin{array} { c } 
\
\text { Units of } \
\text { Product }\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, X } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\
\text { Marginal Utility, Y } \
( \text { Price } = \$ 1 )\
\hline
\end{array} & \begin{array} { c } 
\text { Marginal Utility, }\
\text { New Product, Z } \
( \text { Price } = \$ 1 )\
\hline
\end{array} \
 \text { First } & 12 & 16 & 20 \
\text { Second } & 10 & 14 & 18 \
\text { Third } & 8 & 12 & 16 \
\text { Fourth } & 6 & 10 & 14 \
\text { Fifth } & 4 & 8 & 12 \
\text { Sixth } & 2 & 6 & 10 \
\text { Seventh } & 0 & 4 & 8
\end{array}
\end{array}$$ Refer to the data for a utility-maximizing consumer.Assume that new product Z doesn't exist.How many units of X and Y will this consumer buy,given his or her $12 budget?

Accepted Answer

A)  5 of X and 7 of Y. 
B)  7 of X and 5 of Y. 
C)  6 of X and 6 of Y. 
D)  5 of X and 6 of Y. 
A)  5 of X and 7 of Y. 
B)  7 of X and 5 of Y. 
C)  6 of X and 6 of Y. 
D)  5 of X and 6 of Y.

Question 20

Technological advance is shown as a(n):

Accepted Answer

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. 
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.

We know with certainty that a consumer will buy a newly introduced product rather than an existing product when the:

When economists view technological change as internal to the economy,they mean that it:

In economists' models,technological advance occurs in:

Creative destruction is:

Suppose firm X implements a new method for extracting copper from copper-bearing ore.This is an example of:

The process by which new firms and new products replace existing dominant firms and products is called:

Venture capital is another name for retained earnings.

Process innovation is represented as a downward shift in a firm's total product curve and its average total cost curve.

Which among the following is the strongest determinant of an industry's technological progressiveness?

In the inverted-U theory of R&D:

The marginal benefit to a firm from its R&D expenditures is depicted by its:

Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings?

Suppose that Marlen Fisher has legal protection against anyone producing and selling a fishing lure identical to his unique-action "MarFish" lure,whatever the competitor might name the lure.This legal protection is most likely to be a:

(Consider This)The central idea illustrated by the vignette on "catgut" used as violin strings is:

Broadly defined,technological advance:

The corporate decision on type and level of R&D activity is difficult because:

The spread of innovation through imitation refers to:

Technological advance is shown as a(n):

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 14: Technology RD and Efficiency

We know with certainty that a consumer will buy a newly introduced product rather than an existing product when the:

When economists view technological change as internal to the economy,they mean that it:

In economists' models,technological advance occurs in:

Creative destruction is:

Suppose firm X implements a new method for extracting copper from copper-bearing ore.This is an example of:

The process by which new firms and new products replace existing dominant firms and products is called:

Venture capital is another name for retained earnings.

Process innovation is represented as a downward shift in a firm's total product curve and its average total cost curve.

Which among the following is the strongest determinant of an industry's technological progressiveness?

In the inverted-U theory of R&D:

The marginal benefit to a firm from its R&D expenditures is depicted by its:

Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings?

Suppose that Marlen Fisher has legal protection against anyone producing and selling a fishing lure identical to his unique-action "MarFish" lure,whatever the competitor might name the lure.This legal protection is most likely to be a:

(Consider This)The central idea illustrated by the vignette on "catgut" used as violin strings is:

Broadly defined,technological advance:

The corporate decision on type and level of R&D activity is difficult because:

The spread of innovation through imitation refers to:

Technological advance is shown as a(n):

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters