Question 1

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) B) and D)
F) A) and B)

Question 2

If a particular R&D expenditure is expected to be worthwhile, the firm should undertake it because the project will definitely increase the firm's future profits.

Accepted Answer

A) True 
 B)False

Question 3

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 4

The major source of new scientific knowledge in the United States is

Accepted Answer

A)  university and government research.
B)  R&D work in large corporations.
C)  entrepreneurs working alone.
D)  purely competitive and monopolistically competitive firms.E) C) and D)
F) A) and B)

Question 5

Under which market structure are profit rewards most likely to be quickly taken away by existing firms or new firms entering the industry?

Accepted Answer

A)  oligopoly
B)  pure monopoly
C)  pure competition
D)  monopolistic competitionE) None of the above
F) B) and D)

Question 6

In 2015, the following firms were among the top 10 in terms of securing the most U.S.patents, except

Accepted Answer

A)  IBM.
B)  Google.
C)  Intel.
D)  Amazon.E) A) and C)
F) None of the above

Question 7

(Last Word)  The percentage of the U.S.federal budget spent on R&D has

Accepted Answer

A)  risen significantly over the past 50 years.
B)  remained stable over the past 50 years.
C)  declined substantially over the past 50 years.
D)  risen dramatically in the past few years after a steady decline starting in 1980.E) C) and D)
F) A) and B)

Question 8

Which two market structures have a strong need to innovate but have low expected returns on R&D expenditures?

Accepted Answer

A)  monopoly and oligopoly
B)  oligopoly and pure competition
C)  monopoly and monopolistic competition
D)  monopolistic competition and pure competitionE) B) and D)
F) None of the above

Question 9

The interest-rate cost-of-funds curve is perfectly elastic because firms can borrow as much or as little as they want at market interest rates.

Accepted Answer

A) True 
 B)False

Question 10

Consumers will make a decision to purchase a new product only if it

Accepted Answer

A)  has a lower marginal utility per dollar spent than another product.
B)  is recommended as a valuable product by other consumers.
C)  increases the total utility they obtain from their limited income.
D)  can be sold at a lower price than that for a competing product.E) A) and B)
F) A) and C)

Question 11

Imitation by rivals is one factor that hinders the diffusion of technological advances.

Accepted Answer

A) True 
 B)False

Question 12

Henry Ford's development of an assembly method for building cars and trucks would be an example of

Accepted Answer

A)  product improvement.
B)  fast-second strategy.
C)  process innovation.
D)  inverted-U theory.E) All of the above
F) C) and D)

Question 13

The following are examples of technological breakthroughs that came out of a government or university laboratory, except

Accepted Answer

A)  the Internet.
B)  genetic engineering.
C)  nuclear energy.
D)  disposable contact lenses.E) All of the above
F) C) and D)

Question 14

The worldwide duration of patents that begins at the time of application is

Accepted Answer

A)  10 years.
B)  1 year.
C)  20 years.
D)  50 years.E) A) and B)
F) A) and C)

Question 15

The two types of innovation are product innovation and

Accepted Answer

A)  resource innovation.
B)  market innovation.
C)  process innovation.
D)  financial innovation.E) B) and C)
F) A) and B)

Question 16

A major source of funding of R&D in large, established corporations is

Accepted Answer

A)  venture capital.
B)  dividends.
C)  mutual funds.
D)  retained earnings.E) B) and D)
F) A) and D)

Question 17

Which of the following is a true statement?

Accepted Answer

A)  Innovation normally follows invention and precedes diffusion.
B)  Invention normally follows diffusion and precedes innovation.
C)  Diffusion normally follows invention and precedes innovation.
D)  Innovation normally follows diffusion and precedes invention.E) C) and D)
F) B) and C)

Question 18

Suppose that a firm's legal staff concludes that a new production process that the firm is developing is patentable.Graphically, this new information would shift the firm's expected-rate-of-return curve on R&D to the

Accepted Answer

A)  right and reduce its optimal amount of R&D.
B)  right and increase its optimal amount of R&D.
C)  left and increase its optimal amount of R&D.
D)  left and reduce its optimal amount of R&D.E) B) and C)
F) A) and C)

Question 19

Which of the following supports the contention that monopolistic competitors have a strong incentive to engage in R&D?

Accepted Answer

A)  Entry to monopolistic competitive industries is relatively easy, and thus profit from innovation is quickly competed away.
B)  Most monopolistic competitive industries are decreasing-cost industries.
C)  The desire to differentiate products from competitors may motivate monopolistic competitors to engage in R&D.
D)  Monopolistic competitors have large retained earnings that are available to finance R&D.E) B) and D)
F) None of the above

Question 20

(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) A) and B)
F) A) and C)

Exam 15: Technology, Rd, and Efficiency

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

Correct AnswerverifiedShow Answer

Henry Ford's development of an assembly method for building cars and trucks would be an example of

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Under which market structure are profit rewards most likely to be quickly taken away by existing firms or new firms entering the industry?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

The major source of new scientific knowledge in the United States is

Correct AnswerverifiedShow Answer

The worldwide duration of patents that begins at the time of application is

Correct AnswerverifiedShow Answer

Which of the following supports the contention that monopolistic competitors have a strong incentive to engage in R&D?

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

The following are examples of technological breakthroughs that came out of a government or university laboratory, except

Correct AnswerverifiedShow Answer

A major source of funding of R&D in large, established corporations is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a particular R&D expenditure is expected to be worthwhile, the firm should undertake it because the project will definitely increase the firm's future profits.

Correct AnswerverifiedShow Answer

(Last Word) The percentage of the U.S.federal budget spent on R&D has

Correct AnswerverifiedShow Answer

Suppose that a firm's legal staff concludes that a new production process that the firm is developing is patentable.Graphically, this new information would shift the firm's expected-rate-of-return curve on R&D to the

Correct AnswerverifiedShow Answer

Consumers will make a decision to purchase a new product only if it

Correct AnswerverifiedShow Answer

Imitation by rivals is one factor that hinders the diffusion of technological advances.

Correct AnswerverifiedShow Answer

The two types of innovation are product innovation and

Correct AnswerverifiedShow Answer

In 2015, the following firms were among the top 10 in terms of securing the most U.S.patents, except

Correct AnswerverifiedShow Answer

The interest-rate cost-of-funds curve is perfectly elastic because firms can borrow as much or as little as they want at market interest rates.

Correct AnswerverifiedShow Answer

Which two market structures have a strong need to innovate but have low expected returns on R&D expenditures?

Correct AnswerverifiedShow Answer

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