Question 1

The legal protection for publishers of books, computer software, movies, videos, and musical compositions from having their works used or copied by others without their permission is a

Accepted Answer

A)   patent.
B)   copyright.
C)   brand name.
D)   trademark.E) A) and D)
F) B) and C)

Question 2

Technological advance improves allocative efficiency by

Accepted Answer

A)   enhancing monopoly power.
B)   reducing income inequality.
C)   giving society a more-preferred mix of goods and services.
D)   encouraging saving.E) None of the above
F) C) and D)

Question 3

Fast-second strategies are more likely to be used by

Accepted Answer

A)   dominant firms than by start-up firms.
B)   pure competitors rather than by oligopolists.
C)   start-up firms rather than by existing firms.
D)   entrepreneurs rather than by corporations.E) A) and D)
F) A) and B)

Question 4

U.S. firms collectively devote the largest portion of their total R&D spending to

Accepted Answer

A)   applied research (pursuing invention) .
B)   basic scientific research.
C)   innovation and diffusion.
D)   financing start-up firms.E) A) and D)
F) A) and C)

Question 5

The first successful commercial introduction of a new product is called

Accepted Answer

A)   innovation.
B)   research.
C)   invention.
D)   diffusion.E) A) and B)
F) None of the above

Question 6

Assume a firm faces these costs: total cost of capital = $4,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $8 per raw-material unit. Originally the firm produced 2,000 units of output by combining its fixed capital with 200 units of labor and 500 units of raw materials. Now the firm changes its production process so that it can produce 3,000 units of output by combining its fixed capital with 100 units of labor and 500 units of raw materials. What happened to average total cost?

Accepted Answer

A)   ATC decreased by $2.67
B)   ATC increased by $2.67
C)   ATC increased by $3.33
D)   ATC decreased by $3.33E) B) and D)
F) B) and C)

Question 7

Assume a firm faces these costs: total cost of capital = $4,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $8 per raw-material unit. If the firm can produce 2,000 units of output by combining its fixed capital with 200 units of labor and 500 units of raw materials, what are the total cost (TC)  and average total cost (ATC)  of producing the 2,000 units of output?

Accepted Answer

A)   TC = $4,000; ATC = $4.00
B)   TC = $8,000; ATC = $5.00
C)   TC = $12,000; ATC = $6.00
D)   TC = $15,000; ATC = $8.00E) A) and C)
F) B) and D)

Question 8

Which of the following correctly orders, highest to lowest, the relative magnitudes of U.S. spending by businesses on components of R&D?

Accepted Answer

A)   invention, basic research, innovation
B)   invention, innovation, basic research
C)   innovation, invention, basic research
D)   basic research, invention, innovationE) B) and C)
F) A) and D)

Question 9

When a dominant firm quickly copies the new product innovation of a smaller firm so that it is the next firm to make the innovation, it is following a

Accepted Answer

A)   venture capital strategy.
B)   retained earning strategy.
C)   fast-second strategy.
D)   start-up strategy.E) B) and C)
F) A) and D)

Question 10

About percent of business R&D spending is for basic research.

Accepted Answer

A)   1
B)   5
C)   20
D)   75E) A) and C)
F) A) and B)

Question 11

Process innovation raises the firm's total product curve and lowers its average total cost curve.

Accepted Answer

A) True 
 B)False

Question 12

In the inverted-U theory of R&D, which of the following industry concentration ratios would be most conducive to R&D (as a percentage of firm sales) ?

Accepted Answer

A)   1 percent
B)   10 percent
C)   50 percent
D)   70 percentE) None of the above
F) B) and D)

Question 13

The legal protection that gives the original innovators of products the exclusive right to use a particular product name is a

Accepted Answer

A)   patent.
B)   copyright.
C)   brand name.
D)   trademark.E) B) and C)
F) B) and D)

Question 14

Even where imitation is possible, a firm may gain advantage from being the first to introduce an innovative product because of

Accepted Answer

A)   long-lasting brand-name recognition.
B)   a time lag between innovation and imitation by rivals.
C)   trade secrets that limit the ability of rivals to exactly imitate the product.
D)   all of the other answers are correct.E) A) and B)
F) None of the above

Question 15

In the 1800s, railroads broke up the monopoly position of wagons, ships, and barges as the major means of transporting goods. This would be an example of

Accepted Answer

A)   the fast-second strategy.
B)   the inverted-U theory.
C)   creative destruction.
D)   venture capital.E) B) and D)
F) A) and B)

Question 16

A common way by which governments encourage invention is by providing the inventor with a

Accepted Answer

A)   patent.
B)   copyright.
C)   trade secret.
D)   trademark.E) A) and B)
F) A) and C)

Question 17

Which market structure has a strong incentive for product development and differentiation?

Accepted Answer

A)   monopolistic competition
B)   pure competition
C)   pure monopoly
D)   oligopolyE) C) and D)
F) A) and C)

Question 18

The discovery of a product or process through the use of imagination, ingenious thinking, and experimentation is

Accepted Answer

A)   process innovation.
B)   product innovation.
C)   invention.
D)   imitation.E) B) and C)
F) A) and C)

Question 19

Why is the percentage of business research and development spending for basic research so small?

Accepted Answer

A)   Basic research is the sole responsibility of university research labs.
B)   Scientific knowledge has minimal effect on technological advance.
C)   Scientific principles cannot be easily patented or commercialized.
D)   Basic research is confusing and not well understood by business executives.E) B) and C)
F) All of the above

Question 20

Which of the following programs receives the smallest share of total Federal spending?

Accepted Answer

A)   Social Security
B)   defense
C)   Medicare
D)   research & developmentE) C) and D)
F) All of the above

Exam 15: Technology, Rd, and Efficiency

Correct Answer
verified

About percent of business R&D spending is for basic research.

Correct Answer
verified

A common way by which governments encourage invention is by providing the inventor with a

Correct Answer
verified

The discovery of a product or process through the use of imagination, ingenious thinking, and experimentation is

Correct Answer
verified

In the inverted-U theory of R&D, which of the following industry concentration ratios would be most conducive to R&D (as a percentage of firm sales) ?

Correct Answer
verified

U.S. firms collectively devote the largest portion of their total R&D spending to

Correct Answer
verified

Technological advance improves allocative efficiency by

Correct Answer
verified

Which of the following programs receives the smallest share of total Federal spending?

Correct Answer
verified

Why is the percentage of business research and development spending for basic research so small?

Correct Answer
verified

Fast-second strategies are more likely to be used by

Correct Answer
verified

The legal protection for publishers of books, computer software, movies, videos, and musical compositions from having their works used or copied by others without their permission is a

Correct Answer
verified

In the 1800s, railroads broke up the monopoly position of wagons, ships, and barges as the major means of transporting goods. This would be an example of

Correct Answer
verified

The first successful commercial introduction of a new product is called

Correct Answer
verified

Which market structure has a strong incentive for product development and differentiation?

Correct Answer
verified

When a dominant firm quickly copies the new product innovation of a smaller firm so that it is the next firm to make the innovation, it is following a

Correct Answer
verified

The legal protection that gives the original innovators of products the exclusive right to use a particular product name is a

Correct Answer
verified

Process innovation raises the firm's total product curve and lowers its average total cost curve.

Correct Answer
verified

Even where imitation is possible, a firm may gain advantage from being the first to introduce an innovative product because of

Correct Answer
verified

Correct Answer
verified

Which of the following correctly orders, highest to lowest, the relative magnitudes of U.S. spending by businesses on components of R&D?

Correct Answer
verified

Exam 15: Technology, Rd, and Efficiency

Correct AnswerverifiedShow Answer

About percent of business R&D spending is for basic research.

Correct AnswerverifiedShow Answer

A common way by which governments encourage invention is by providing the inventor with a

Correct AnswerverifiedShow Answer

The discovery of a product or process through the use of imagination, ingenious thinking, and experimentation is

Correct AnswerverifiedShow Answer

In the inverted-U theory of R&D, which of the following industry concentration ratios would be most conducive to R&D (as a percentage of firm sales) ?

Correct AnswerverifiedShow Answer

U.S. firms collectively devote the largest portion of their total R&D spending to

Correct AnswerverifiedShow Answer

Technological advance improves allocative efficiency by

Correct AnswerverifiedShow Answer

Which of the following programs receives the smallest share of total Federal spending?

Correct AnswerverifiedShow Answer

Why is the percentage of business research and development spending for basic research so small?

Correct AnswerverifiedShow Answer

Fast-second strategies are more likely to be used by

Correct AnswerverifiedShow Answer

The legal protection for publishers of books, computer software, movies, videos, and musical compositions from having their works used or copied by others without their permission is a

Correct AnswerverifiedShow Answer

In the 1800s, railroads broke up the monopoly position of wagons, ships, and barges as the major means of transporting goods. This would be an example of

Correct AnswerverifiedShow Answer

The first successful commercial introduction of a new product is called

Correct AnswerverifiedShow Answer

Which market structure has a strong incentive for product development and differentiation?

Correct AnswerverifiedShow Answer

When a dominant firm quickly copies the new product innovation of a smaller firm so that it is the next firm to make the innovation, it is following a

Correct AnswerverifiedShow Answer

The legal protection that gives the original innovators of products the exclusive right to use a particular product name is a

Correct AnswerverifiedShow Answer

Process innovation raises the firm's total product curve and lowers its average total cost curve.

Correct AnswerverifiedShow Answer

Even where imitation is possible, a firm may gain advantage from being the first to introduce an innovative product because of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following correctly orders, highest to lowest, the relative magnitudes of U.S. spending by businesses on components of R&D?

Correct AnswerverifiedShow Answer

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