Why are too few resources devoted to the creation of knowledge?
a) Profit-seeking firms tend to free-ride on the knowledge that others have developed.
b) Profit-seeking firms undervalue knowledge in their pursuit of revenues.
c) Profit-seeking firms tend to rely on existing employee knowledge.
d) Profit-seeking firms abuse their patents.
Ans: a) Profit-seeking firms tend to free-ride on the knowledge that others have developed.
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Calculate the change in the price level for each of the following events, taken one at a time, with other variables unchanged.
(a) Money supply increases 10%. (b) Money demand increases 5% (c) Money supply decreases 5% while money demand increases 5%. (d) Money supply increases 15% while money demand increases 5%.
When we focus on labor as an input in the production process, we typically draw the production function by measuring the
a. quantity of labor on the horizontal axis and the quantity of output on the vertical axis. b. quantity of labor on the horizontal axis and the marginal product of labor on the vertical axis. c. quantity of labor on the horizontal axis and the value of the marginal product of labor on the vertical axis. d. value of the marginal product of labor on the horizontal axis and the quantity of output on the vertical axis.