All of the Following Statements Are Correct Except

question 30

Multiple Choice

All of the following statements are correct except

• A)knowledge about one process spills over into other segments of the economy.
• B)additional knowledge makes people more productive,and there seems to be no tendency for the additional productivity from additional knowledge to diminish.
• C)knowledge has no external benefit.
• D)knowledge might be an exception to the principle of diminishing marginal benefit.
• E)it is necessary to use public policies to ensure that those who develop new ideas have incentives to encourage an efficient level of effort.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded.

Equilibrium Quantity

The amount of products or services available matches the amount requested at the prevailing market rate.

Demand Increases

A situation where the desire and ability to purchase goods and services in a market rise, often leading to higher prices if supply remains constant.

Supply Decreases

A reduction in the quantity of a good or service that producers are willing to sell at a given price, often resulting in higher prices.