Chapter 13 Flashcards
What is the key principle of Samsung’s business?
Relentless pursuit of innovation
What is the estimated rate of return to a college education in the US?
10-15%
What is the term for the benefit that includes spillover effects?
Marginal social benefit (MSB)
What is the relationship between public goods and positive externalities?
Public goods have positive externalities
Is online shopping better for the environment?
Yes, generally more efficient.
What caused an increase in the number of patents beginning in the 1990s?
Invention of the internet
What does a patent do in terms of goods?
Makes inventions private
What is considered a public good?
New knowledge
What has increased globalization done to businesses?
Shuttered businesses and reduced wages
What does AFRI stand for?
Agriculture and Food Research Initiative
Why do nations subsidize education?
Benefits individuals and society
What is the R&E tax credit?
Research and experimentation tax credit
What is a public good?
National defense example
What type of goods are nonexcludable and rivalrous?
Common resources
What is one U.S. Government policy that encourages innovation?
Intellectual property rights
What are the defining characteristics of a public good?
Nonexcludable and non-rival
What is a challenge of government innovation?
Employment change
What do social benefits of innovation include?
Positive externalities and private benefits
What does non-rival mean in public goods?
One person can use it without affecting another
Do economists generally believe higher education pays off?
Yes
Who benefits from the returns to education?
Individual worker
What is a drawback of the 20-year patent period?
Allows monopoly pricing
How has the reliance on R&D funding changed over time?
Shifted to industry-funded
What are examples of public goods?
Police and fire services
What advantage does an innovative firm have?
Temporary edge over competitors
What are positive externalities of education?
Better health, lower crime, cleaner environment, stable government
Can goods and services with positive externalities be private?
Yes
Give an example of a private good with positive externalities.
Education, Apple iPad
