Question 1

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.E) A) and C)
F) A) and B)

Question 2

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.E) B) and D)
F) B) and C)

Question 3

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.E) A) and B)
F) A) and C)

Question 4

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.E) All of the above
F) B) and D)

Question 5

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.E) All of the above
F) A) and B)

Question 6

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.E) A) and B)
F) B) and C)

Question 7

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 8

Venture capital is another name for retained earnings.

Accepted Answer

A) True 
 B)False

Question 9

Consumer's income = $12   Units of  Product  Marginal Utility, X ( Price =$1)  Marginal Utility, Y ( Price =$1)  Marginal Utility,  New Product, Z ( Price =$1)  First 121620 Second 101418 Third 81216 Fourth 61014 Fifth 4812 Sixth 2610 Seventh 048\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} Units of  Product ​​ First  Second  Third  Fourth  Fifth  Sixth  Seventh ​ Marginal Utility, X ( Price =$1) ​​121086420​ Marginal Utility, Y ( Price =$1) ​​16141210864​ Marginal Utility,  New Product, Z ( Price =$1) ​​2018161412108​​  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. E) B) and C)
F) A) and D)

Question 10

Consumer's income = $12   Units of  Product  Marginal Utility, X ( Price =$1)  Marginal Utility, Y ( Price =$1)  Marginal Utility,  New Product, Z ( Price =$1)  First 121620 Second 101418 Third 81216 Fourth 61014 Fifth 4812 Sixth 2610 Seventh 048\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} Units of  Product ​​ First  Second  Third  Fourth  Fifth  Sixth  Seventh ​ Marginal Utility, X ( Price =$1) ​​121086420​ Marginal Utility, Y ( Price =$1) ​​16141210864​ Marginal Utility,  New Product, Z ( Price =$1) ​​2018161412108​​  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. E) None of the above
F) B) and D)

Question 11

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.E) None of the above
F) All of the above

Question 12

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.E) A) and B)
F) B) and C)

Question 13

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.E) A) and C)
F) None of the above

Question 14

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.E) B) and C)
F) None of the above

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.E) None of the above
F) A) and C)

Question 16

The spread of innovation through imitation refers to:

Accepted Answer

A)   invention.
B)   diffusion.
C)   duplication.
D)   diversification.E) A) and B)
F) A) and D)

Question 17

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.E) A) and B)
F) A) and C)

Question 18

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.E) C) and D)
F) A) and B)

Question 19

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.E) B) and D)
F) None of the above

Question 20

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.E) B) and D)
F) C) and D)

Exam 14: Technology RD and Efficiency

Technological advance is shown as a(n) :

Correct Answer
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The spread of innovation through imitation refers to:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

In economists' models,technological advance occurs in:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Creative destruction is:

Correct Answer
verified

Broadly defined,technological advance:

Correct Answer
verified

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:

Correct Answer
verified

In the inverted-U theory of R&D:

Correct Answer
verified

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

Correct Answer
verified

Venture capital is another name for retained earnings.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 14: Technology RD and Efficiency

Technological advance is shown as a(n) :

Correct AnswerverifiedShow Answer

The spread of innovation through imitation refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In economists' models,technological advance occurs in:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Creative destruction is:

Correct AnswerverifiedShow Answer

Broadly defined,technological advance:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

In the inverted-U theory of R&D:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Venture capital is another name for retained earnings.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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