Competition keeps prices lower for consumers. So why do we have patent laws?
What will be an ideal response?
Patent laws are necessary to promote innovation. Without such laws an inventor might spend countless hours and a great deal of money developing a new product, put the product out into the market only to have a competitor copy it without incurring any of the time or costs to develop it. In the long run, this prospect would serve as a mighty disincentive to innovate and so would drastically reduce the supply of new products that come into the market.
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If the Fed reduces the supply of bank reserves, ________
A) investment increases B) consumption increases C) the federal funds rate increases D) the federal funds rate falls
The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?
A) a movement from point C to point B B) a movement from point A to point B C) an upward shift or rotation of the production function D) a downward shift or rotation of the production function E) None of the above because the effects of an increase in unemployment benefits cannot be shown in the figure.