____ 23. Firms share technology with rivals, a. in order to better compete with
ID: 1213863 • Letter: #
Question
____ 23. Firms share technology with rivals,
a.
in order to better compete with their rivals.
b.
in order to help out when their rivals are in trouble.
c.
to share the substantial risks of innovation.
d.
because they are required to by law.
e.
in order to pass false information to their rivals in order to drive them out of business.
____ 24. A profit-maximizing monopoly will spend on a process innovation
a.
up to the point where P = MC.
b.
up to the point where P = AC.
c.
anywhere where MR>MC.
d.
up to the point where MR = MC.
e.
anywhere where MR<MC.
____ 25. A successful process innovation can be expected to lead to
a.
an upward shift of the MC and AC curves which will lower output and raise the price of the product.
b.
an upward shift of the MC and AC curves which will raise output and lower the price of the product.
c.
a downward shift of the MC and AC curves which will lower output and raise the price of the product.
d.
a downward shift of the MC and AC curves which will raise output and lower the price of the product.
e.
a downward shift of the MC and AC curves which will leave unchanged the output and price of the product.
____ 26. A firm producing a smoke externality is producing
a.
more than the socially optimal quantity of output.
b.
less than the socially optimal quantity of output.
c.
exactly the socially optimal quantity of output.
d.
There is insufficient information to answer.
____ 27. Rising prices help control the process of resource depletion by
a.
discouraging consumption and waste.
b.
stimulating more efficient use of the depletable resource.
c.
encouraging resource-saving innovation.
d.
doing all of the above.
____ 28. Rising prices for a natural resource stimulate
a.
the development of complements for the resource.
b.
the development of substitutes for the resource.
c.
the development of externalities from the resource.
d.
All of the above are correct.
____ 29. Taxes on sales of liquor, tobacco, gasoline and non-essentials are examples of
a.
direct taxes.
b.
excise taxes.
c.
progressive taxation.
d.
loopholes.
____ 30. The incidence of a tax refers to
a.
who actually collects the tax.
b.
how frequently the tax is collected.
c.
who bears the economic burden of the tax.
d.
how the tax affects prices or wages.
a.
in order to better compete with their rivals.
b.
in order to help out when their rivals are in trouble.
c.
to share the substantial risks of innovation.
d.
because they are required to by law.
e.
in order to pass false information to their rivals in order to drive them out of business.
Explanation / Answer
23.
c.
to share the substantial risks of innovation.
in this case generally firms shares technology with the peers to diversfy the risk and earn returns to reduce overall costs
c.
to share the substantial risks of innovation.
in this case generally firms shares technology with the peers to diversfy the risk and earn returns to reduce overall costs
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