In Shoetown,a Rancher Takes $0 Worth of Inputs and Produces

question 27

Multiple Choice

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added by the tanner is

• A)$0.
• B)$300.
• C)$400.
• D)$500.
• E)$1200.

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Definitions:

Patents

Legal rights granted to inventors to exclusively produce, use, and sell their invention for a certain period of time, providing protection against unauthorized use.

R&D Expenditure

Funding allocated towards research and development activities to innovate or improve products or services.

Expected Rate of Return

A measure of the anticipated profit or loss on an investment, expressed as a percentage of the investment's initial cost.

Fast-Second Strategies

Business tactics employed by companies to quickly follow innovators, capitalizing on the market research and initial developments made by the first movers without bearing the same risks or costs.