### Understanding Diminishing Returns and Patents in Economic Growth#### Question 1A country faces diminishing marginal returns when increasing its capital stock. If this country added 1,000 units of capital last year and saw their GDP rise by $500 per person, what would you expect to happen if they had added 2,000 units of capital instead?- O GDP would increase by another $500 per person- O GDP would increase by less than another $500 per person- O GDP would increase by more than another $500 per person- O It is impossible to tell what would happen#### Question 2What is a potential downside of using patents to promote the creation of new technology?- O Without a market test, patents might be given to technology which ends up being useless.- O Government money may be directed towards unproductive goals.- O It slows the spread and development of those ideas by restricting competition.- O They prohibit competition forever.#### Question 3What is the law of diminishing marginal returns?---### Analysis- **Diminishing Marginal Returns:** This economic principle signifies that as more units of a certain factor of production are added, the additional output generated from each new unit will eventually decrease. For instance, if a country significantly increases its capital units but the incremental gains in GDP per person start to drop, it indicates diminishing marginal returns.- **Patents and Innovation:** While patents are designed to encourage innovation by protecting the rights of inventors, there are several potential downsides. These include the risk of over-investing in technology without proven market potential, misallocation of government resources, potential stifling of competition, and enduring monopolies which can hinder technological progress and accessibility.### Learning Objectives- Understand the concept of diminishing marginal returns and its implications for economic growth.- Evaluate the impacts and potential drawbacks of using patents as a policy tool to foster technological innovation.

Diminishing marginal returns is defined as the decrease in production with the addition of more and…

A country faces diminishing marginal returns when increasing it's capital stock. If this country added 1,000 units of capital last year and saw their GDP rise by $500 per person, what would you expect to happen if they had added 2,000 units of capital instead? O GDP would increase by another $500 per person O GDP would increase by less than another $500 per person GDP would increase by more than another $500 per person O It is impossible to tell what would happen What is a potential downside of using patents to promote the creation of new technology? O Without a market test, patents might be given to technology which ends up being useless. O Government money may be directed towards unproductive goals. O It slows the spread and development of those ideas by restricting competition. O They prohibit competition forever.

A country faces diminishing marginal returns when increasing it's capital stock. If this country added 1,000 units of capital last year and saw their GDP rise by $500 per person, what would you expect to happen if they had added 2,000 units of capital instead? O GDP would increase by another $500 per person O GDP would increase by less than another $500 per person GDP would increase by more than another $500 per person O It is impossible to tell what would happen What is a potential downside of using patents to promote the creation of new technology? O Without a market test, patents might be given to technology which ends up being useless. O Government money may be directed towards unproductive goals. O It slows the spread and development of those ideas by restricting competition. O They prohibit competition forever.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

YIN CN Next question Suppose that the production function is given by Y- 05VR N 454 where Y is output, Kis capital, and N is the number of workers 4 Suppose that 60 05 With your favonte spreadsheet software, compute steady-state output per worker and steady-state consumption per worker for s 0, 801, a02, s1 Graph the steady-state level of output per worker and the steady-state level of consumption per worker as a function of the saving rate 25 1) Using the multipoint curve drawing tool, drawa curve showing the relationship between YIN and the saving rate. Properly label your curve 15 2) Using the multipoint curve drawing tool, draw a curve showing the relationship between CIN and the saving rate. Properly label your curve 0.5 Although the control ponts for your multpownt curves do not have to be exact try to plot them as accurately as possible 01 02 03 a'4 os o6 07 os 09 Saving rate, At what saving rates are YIN and CIN maximized? After plotting the final point of your multipoint curve…
|The per capita output of an economy is likely to increase if: a. the government manages the foreign investment in the economy. O b. the population of the country grows faster than its labor force. O c. the government controls the number of illegal immigrant workers in the economy. O d. the government increases the tax rates. e. the number of workers in the economy grows faster than its population.
When economists speak of "long-run economic growth, they mean increasing the Select one: O a. real GDP of a country. O O O b. geographic size of a country. c. per capita real GDP of a country. d. population of a country. According to the instructors calculations, the average person in the United States spends Select one: O O O O a. approximately 5 and ½ hours b. about 3 and ½ hours c about 8 hours d. 45 minutes On a graph with savings on the x-axis and real interest rates on the y-axis, the supply of savings curve following the law of supply would: Select one: O O O O a. be horizontal a day in activities needed to continue living (what he described as not dying b. have a negative slope c. be vertical d. have a positive slope
Suppose that a country produces 200 million dollar value of total outputin a year. The country produces only two goods: pepperoni pizzas andbottles of soda. The price of a pepperoni pizza is $5 and the price ofa bottle of soda is $2. Draw the country’s iso-value line on a graph. Ifthe price of a pepperoni pizza increases to $8, what will happen to thecountry’s iso-value line?
Which of the following statements describes economic growth? The economy moves from a point inside the PPF to a point on the PPF. O The economy moves along the PPF. O The economy's PPF shifts outward. O The economy operates at a point outside the PPF.
Refer to the figure below and assume that the values for points a, b, and c(the combined value of consumer goods and capital goods) are $20 billion, $40 billion, and $32 billion, respectively. C > Capital goods Economic growth Optimal output combination B D Consumer goods Instructions: Enter your answers as a whole number. a. If the economy moves from point a to point bover a 7-year period, what must have been its annual rate of economic growth? percent b. If, instead, the economy was at point c at the end of the 7-year period, by what percentage did it fall short of its production capacity? Inercent
. Suppose that society decided to reduce consumptionand increase investment.a. How would this change affect economic growth?b. What groups in society would benefit from thischange? What groups might be hurt?
QUESTION 13 A nation's real GDP was $250 billion last year and $265 billion this year. Its population was 122 million last year and 125 million this year. What is the growth rate of real GDP per capita in this year? O a. 1.1 percent O b. 2.5 percent Oc.5.0 percent O d. 3.4 percent
during the course of 20 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same. Bronscript Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2020 and 2040. Physical Capital Year (Tools per worker) 2020 18 2040 23 Year 2020 2040 Physical Capital (Tools per worker) 15 20 Hestiatia Labor Force (Workers) 60 60 Labor Force (Workers) 60 60 Output (Crates of copia) 3,600 4,320 Pelheim Output (Crates of copia) 1,800 3,240 Productivity (Crates per worker) Productivity (Crates per worker) Initially, the number of tools per worker was higher in Hestiatia than in Pelheim. From 2020 to 2040, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Pelheim. This illustrates the effect.
12
Jtilizing the aggregate production functions to the right, Robert Solow asserted that the most significant or critical factor in driving long term economic growth is and is reflected in the movement from to O A. capital accumulation; "B" to C" Production function3 D B. technological change; "A" to "B" Production function2 O C. economies of scale; "D" to "C" O D. technological change; "B" to "C Production function, :B O E. capital accumulation; "A" to "C" $40 Capital per hour worked (K/L) 60 Click to select your answer. la 19 Lhednge SSS-76 DOCX cBook Air F9 F10 F11 F12 F7 F8 + 8 9 del Real GDP per houraorked (Y/L)
Explain it now