What is the distinction between innovation and invention?
What will be an ideal response?
Invention is the act of generating a new idea or device. Innovation is the act of putting the new idea or device into practical use. Innovation is one important source of profits.
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Suppose a firm uses land, labor, and capital for its production process. If it is renting the equilibrium quantity of all three factors of production, then which of the following conditions will hold?
A) Marginal product from the last dollar spent on land = Marginal product from last dollar spent on labor > Marginal product from the last dollar spent on capital B) Marginal product from the last dollar spent on land > Marginal product from last dollar spent on labor > Marginal product from the last dollar spent on capital C) Marginal product from the last dollar spent on land > Marginal product from last dollar spent on labor = Marginal product from the last dollar spent on capital D) Marginal product from the last dollar spent on land = Marginal product from last dollar spent on labor = Marginal product from the last dollar spent on capital
In an Israeli factory, each worker can produce 2/5 of a shirt in an hour or 1/10 of a pair of pants in an hour. If there are 500 workers in the factory, what is opportunity cost of producing one shirt?
a. 1 pair of pants b. 4 pairs of pants c. 1/2 pair of pants d. 1/4 pair of pants e. 2 pairs of pants