Would companies and individuals invest as much in significant research and development if a system of patents were not available?
a. Yes they would, because they could still hope to monopolize the market.
b. Yes they would, because firms are civic-minded and highly motivated to introduce innovations that improve the standard of living.
c. No they would not, because if they made a significant investment in the development, they would be unable to protect the innovations or discoveries long enough to be sufficiently compensated for their efforts.
d. No they would not, because the benefits to society of engaging in research and development would be less than the costs to society.
Question 2Which of the following would not cause any kind of an outward shift of a nation's production possibilities curve PPC?
a. An improvement in the general level of education
b. Technological innovation
c. Discovery of a new source of energy
d. An increase in the size of the labor force
e. A flood that renders thousands of acres of farmland unusable
Question 3Which of the following is true?
a. People specialize by concentrating their energies on the activity to which they are best suited, because they incur lower opportunity costs as a result.
b. One advantage of specialization is that workers acquire greater skill from repetition.
c. If a person, a region, or a country can produce a good or service at a lower opportunity cost than others, we say that they have a comparative advantage in the production of that good or service.
d. All of the above are true.
Question 4Many scholars believe that the importance of research and development is understated. Efforts in research and development can include:
a. the introduction of new products.
b. management improvements.
c. production innovations.
d. any of the above.
Question 5Which of the following will result in an outward shift of the production possibilities curve PPC?
a. A decrease in the quantity of resources
b. An improvement in the quality of resources
c. A fall in education standards
d. An unsustainable growth in population
e. An increase in unemployment rate
Question 6If a university begins a policy of permanently expelling any student caught cheating in any way, you would expect that:
a. no students would cheat.
b. fewer students would cheat.
c. major cases of cheating would become a larger fraction of all cases of cheating attempted.
d. Both b. and c. would occur.
Question 7As more capital per worker is added, a per worker production function generally becomes:
a. flatter because capital is subject to diminishing marginal returns.
b. flatter because labor is subject to diminishing marginal returns.
c. flatter because capital is subject to increasing marginal returns.
d. steeper because capital is subject to diminishing marginal returns.
Question 8If the general education level within a country rises significantly over time, it is likely that:
a. the country will move to a different point along its current production possibilities curve.
b. the country's production possibilities curve will not change in any way.
c. the country's production possibilities curve will shift in.
d. the country's production possibilities curve will shift out.
e. the country's production possibilities curve will become convex to the origin.
Question 9If a university begins a policy of permanently expelling any student caught cheating in any way, you would expect that:
a. no students would cheat.
b. fewer students would cheat.
c. there would be no difference in the amount of cheating.
d. minor cases of cheating would become a larger fraction of all cases of cheating attempted.
Question 10Is it possible to have economic growth with no opportunity cost?
a. Yes, economic growth requires no current sacrifices-only the passage of time.
b. No, but economic growth is always worth whatever sacrifice is required.
c. No, because growth depletes the stock of knowledge so that more growth today means less growth tomorrow.
d. No, because growth requires the sacrifice of consumption goods in order to invest in such things as capital formation and research and development.
Question 11A point outside the production possibilities curve PPC:
a. represents inefficient use of resources.
b. represents the prevalence of unemployment.
c. is attainable if all resources are used efficiently.
d. represents more resources than are currently available.
e. will never be attainable, even if the quantity of resources increases.
Question 12The goods and services that are used in the production of other goods and services are called:
a. gross domestic goods.
b. intermediate goods.
c. final goods.
d. ultimate goods.
Question 13If a large number of laborers shift from fixed-wage contracts to wages that depend on the cost of living adjustments, the long-run aggregate supply curve for the economy will become relatively steeper.
a. True
b. False
Indicate whether the statement is true or false
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