Question 1

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) C) and D)

Question 2

A consumer will buy a new product rather than an existing product

Accepted Answer

A)  when the MU/ P of the new product is less than the MU/ P of the existing product.
B)  when the substitution of the new product for the old product increases the consumer's total utility.
C)  only if the new product has a lower price than the existing product.
D)  only if the MU of the new product exceeds the MU of the existing product.E) A) and D)
F) B) and C)

Question 3

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

Question 4

Refer to the data for a utility-maximizing consumer whose income = $12. 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 YE) B) and C)
F) A) and C)

Question 5

A firm should increase the amount of R&D expenditures to

Accepted Answer

A)  the maximum amount of funding that is available to the firm.
B)  the point where the expected return equals the cost of funds.
C)  a critical minimum level so that the firm can remain competitive.
D)  a point where the difference between the expected return and the cost of funds is at a maximum.E) A) and B)
F) None of the above

Question 6

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Accepted Answer

A)  $35 million.
B)  $45 million.
C)  $55 million.
D)  $75 million.E) B) and C)
F) None of the above

Question 7

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Accepted Answer

A)  $35 million.
B)  $45 million.
C)  $55 million.
D)  $75 million.E) A) and D)
F) A) and B)

Question 8

Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm's optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D?

Accepted Answer

A)  a rightward shift of the expected-rate-of-return curve
B)  an upward shift of the interest-rate cost-of-funds curve
C)  a leftward shift of the expected-rate-of-return curve
D)  a downward shift of the interest-rate cost-of-funds curveE) B) and C)
F) A) and C)

Question 9

Which market structure is most likely to have the means and some incentive to innovate?

Accepted Answer

A)  oligopoly
B)  pure monopoly
C)  pure competition
D)  monopolistic competitionE) A) and B)
F) A) and C)

Question 10

All of the following increase the expected rate of return on R&D expenditures except

Accepted Answer

A)  patents.
B)  trademarks.
C)  imitation by others.
D)  trade secrets.E) A) and B)
F) All of the above

Question 11

Entrepreneurs differ from other innovators because they

Accepted Answer

A)  are more inventive.
B)  bear personal financial risk.
C)  have better management skills.
D)  have the capacity to work in teams.E) A) and B)
F) All of the above

Question 12

What ways do firms have to finance R&D activities? What is the cost of these forms of funding?

Accepted Answer

The ways that firm can obtain the funds ...

Question 13

In the graph, the difference between points a and b indicates that at $10M of R&D spending, the

Accepted Answer

A)  marginal cost is greater than the marginal benefit.
B)  marginal benefit is greater than the marginal cost.
C)  interest-rate cost-of-funds is equal to the expected rate of return.
D)  interest-rate cost-of-funds is greater than the expected rate of return.E) A) and C)
F) B) and C)

Question 14

What is venture capital?

Accepted Answer

Venture capital is that part o...

Question 15

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

Question 16

Refer to the data for a consumer whose income = $16. Suppose the price of new product Z is $2 rather than $1. This consumer would purchase

Accepted Answer

A)  three units of Z.
B)  four units of Z.
C)  two units of Z.
D)  more of X, Y, and Z than if the price were $1 for Z.E) All of the above
F) A) and D)

Question 17

Which would be a good example of a successful introduction of a new product?

Accepted Answer

A)  McDonald's McLean burger
B)  Microsoft Windows
C)  Kodak disc cameras
D)  New Coke by Coca-ColaE) A) and C)
F) B) and D)

Question 18

In 2017, the following firms were among the top 5 in terms of securing the most U.S. patents, except

Accepted Answer

A)  IBM.
B)  Samsung.
C)  Intel.
D)  Amazon.E) A) and B)
F) C) and D)

Question 19

The table shows the marginal utility schedules for old product X and new product Y for a hypothetical consumer. The price of X is $2, and the price of good Y is $1. The budget of the consumer is $10. If the consumer can only buy old product X, how much will the consumer buy and what will be the total utility from spending the given budget?

Accepted Answer

A)  4X and 52
B)  4X and 10
C)  5X and 8
D)  5X and 60E) C) and D)
F) B) and D)

Question 20

What is an example of a technological breakthrough that came out of a government or university laboratory?

Accepted Answer

A)  nuclear energy
B)  Scotch tape
C)  Thinsulate insulation
D)  Post-it note padsE) C) and D)
F) B) and C)

Exam 15: Technology, RD, and Efficiency

Which would be a good example of a successful introduction of a new product?

Correct Answer
verified

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

Correct Answer
verified

Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm's optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D?

Correct Answer
verified

What ways do firms have to finance R&D activities? What is the cost of these forms of funding?

Correct Answer
verified
The ways that firm can obtain the funds ...
View Answer

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Correct Answer
verified

Entrepreneurs differ from other innovators because they

Correct Answer
verified

A consumer will buy a new product rather than an existing product

Correct Answer
verified

Refer to the data for a utility-maximizing consumer whose income = $12. 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?

Correct Answer
verified

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

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

A firm should increase the amount of R&D expenditures to

Correct Answer
verified

What is an example of a technological breakthrough that came out of a government or university laboratory?

Correct Answer
verified

All of the following increase the expected rate of return on R&D expenditures except

Correct Answer
verified

In the graph, the difference between points a and b indicates that at $10M of R&D spending, the

Correct Answer
verified

Refer to the data for a consumer whose income = $16. Suppose the price of new product Z is $2 rather than $1. This consumer would purchase

Correct Answer
verified

Correct Answer
verified

In 2017, the following firms were among the top 5 in terms of securing the most U.S. patents, except

Correct Answer
verified

Which market structure is most likely to have the means and some incentive to innovate?

Correct Answer
verified

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Correct Answer
verified

What is venture capital?

Correct Answer
verified
Venture capital is that part o...
View Answer

Exam 15: Technology, RD, and Efficiency

Which would be a good example of a successful introduction of a new product?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm's optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D?

Correct AnswerverifiedShow Answer

What ways do firms have to finance R&D activities? What is the cost of these forms of funding?

Correct AnswerverifiedThe ways that firm can obtain the funds ...View AnswerShow Answer

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Correct AnswerverifiedShow Answer

Entrepreneurs differ from other innovators because they

Correct AnswerverifiedShow Answer

A consumer will buy a new product rather than an existing product

Correct AnswerverifiedShow Answer

Refer to the data for a utility-maximizing consumer whose income = $12. 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?

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

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

A firm should increase the amount of R&D expenditures to

Correct AnswerverifiedShow Answer

What is an example of a technological breakthrough that came out of a government or university laboratory?

Correct AnswerverifiedShow Answer

All of the following increase the expected rate of return on R&D expenditures except

Correct AnswerverifiedShow Answer

In the graph, the difference between points a and b indicates that at $10M of R&D spending, the

Correct AnswerverifiedShow Answer

Refer to the data for a consumer whose income = $16. Suppose the price of new product Z is $2 rather than $1. This consumer would purchase

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2017, the following firms were among the top 5 in terms of securing the most U.S. patents, except

Correct AnswerverifiedShow Answer

Which market structure is most likely to have the means and some incentive to innovate?

Correct AnswerverifiedShow Answer

The table shows the expected rate of return, R&D spending, and interest-rate cost-of-funds for a hypothetical firm. If interest-rate cost-of-funds rose to 11, the optimal amount of R&D spending would be

Correct AnswerverifiedShow Answer

What is venture capital?

Correct AnswerverifiedVenture capital is that part o...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The ways that firm can obtain the funds ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Venture capital is that part o...
View Answer