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31) Firms are more likely to devote resources to research and development when

A) the country is in recession.

B) they expect to earn rewards from successful research and development.

C) it is easy to copy new techniques of other firms.

D) the country has been experiencing slow economic growth in order to spur economic growth.

32) A patent is

A) a government protection that gives an inventor the exclusive right to the invention for a limited time period.

B) a government protection that gives an inventor the exclusive right to the invention for an unlimited time period.

C) the right to make a product and sell it at a reasonable price.

D) a recognizable right to the profits associated with a new product or new way of making goods granted by business associations.

33) The reason that patents are granted is

A) to encourage a high rate of consumption.

B) to protect new techniques developed through research and development.

C) to encourage free trade.

D) to increase the labor force.

34) In the United States, a patent lasts

A) 7 years.

B) 14 years.

C) 20 years.

D) forever.

35) Patents stimulate technological advance by

A) making capital more productive.

B) enabling the government to determine which potential technological advances firms should pursue.

C) providing information about the status of technical knowledge in the economy.

D) allowing inventors to capture the economic rewards of their inventions.

36) The benefits from research and development activities

A) are limited to the firm winning a patent.

B) are limited to the firms investing in similar research and development projects.

C) are limited to the nation in which the research and development is taking place.

D) spill over to others, including foreign residents.

37) Foreign residents can benefit from U.S. research and development activity because

A) they ignore U.S. patent laws and steal the technology.

B) they can import the goods, obtaining inputs at lower cost than they would otherwise.

C) countries usually share patented ideas.

D) patents do a poor job of protecting the inventor.

38) One reason that economists encourage free trade is that

A) it encourages a more rapid spread of technology.

B) it allows us to exploit the workers of less developed countries.

C) we can sell more goods.

D) it increases our capital stock.

39) Which of the following is NOT a reason that free trade stimulates economic growth?

A) Free trade encourages a more rapid spread of technology.

B) Industries have larger markets.

C) The importation of technically advanced products enables the country to imitate the technology.

D) Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development.

40) According to the text, the relationship between economic growth and the degree of how closed an economy is

A) positive.

B) negative.

C) constant.

D) unstable.

 

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