A consumer chooses an optimal consumption point where the
a. marginal rate of substitution is maximized.
b. slope of the indifference curve exceeds the slope of the budget constraint by the greatest amount.
c. ratio of the marginal utilities equals the ratio of the prices.
d. All of the above are correct.
c
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An increase in the expected profitability of investment will cause
A) IS to shift right. B) IS to shift left. C) MP to shift upward. D) MP to shift downward.
If Congress reduced the period of patent protection from 20 years to 10 years, what would likely happen to the amount of private research and development?
A. Shorter patent protection would make innovation less lucrative, so the amount of research and development would likely decline. B. Companies would simply stop their research and development. because the cost is not worth the return. C. Companies would spend more on research because the patent period is shorter. D. Companies would not likely change their research and development amounts because they need innovation to survive.