Firms free ride on the research and development of other firms when they
A) buy a firm's newly developed product, and then give it away to consumers.
B) choose a level of research and development that is inefficiently high.
C) license a new technology from a firm that developed the new technology.
D) use knowledge other firms have developed without paying for that knowledge.
D
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The value of an additional baker to a bakery is equal to the
A) price of bread. B) value of marginal product of the baker. C) baker's marginal productivity in terms of loaves of bread. D) marginal cost of making an additional loaf of bread.
The stockholder-manager conflict in a large publicly held firm is manifested in all of the following ways except
A) the managers implement very low-risk strategies that have very low returns. B) the managers implement strategies that maximize the value of the firm. C) managers pursue strategies that maximize firm size rather than the value of the firm. D) the managers attempt to maximize their salaries.