Economic Homework Multiple choice
27. Suppose that a firm's legal staff concludes that a new production process which a firm is developing is patentable. Graphically, this new information would shift the firm's expected rate of return curve on R&D to the:
A. right and reduce its optimal amount of R&D.
B. left and increase its optimal amount of R&D.
C. right and increase its optimal amount of R&D.
D. left and reduce its optimal amount of R&D.
29. Assume that a firm's interest-rate-cost of funds curve for R&D is perfectly elastic. Which of the following would decrease a firm's optimal R&D expenditures and, in equilibrium, leave the expected rate of return on the last dollar of R&D unchanged?
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 curve
36. As it relates to R&D, the expected-rate-of-return curve, r:
A. usually slopes upward.
B. shows the cost of financing various levels of R&D.
C. varies in location depending on the location of the interest-rate-cost-of-funds curve, I.
D. represents the marginal benefit element in the MB = MC decision framework.
37. Industry A has a 60 percent concentration ratio, while industry B has a 40 percent concentration ratio. According to the inverted-U theory, all else equal, we can conclude that:
A. Industry A will be more technologically progressive than B.
B. Industry C with a 10 percent concentration ratio will be more progressive than either industry A or B.
C. Industry D with a 80 percent concentration ratio will be more technologically progressive than either industry A or B.
D. that none of the above are necessarily true.
What I think the answers are but I am not for sure::confused:
27. B
29. B
36. A
37. D
