The Table Shows the Rate of Return and R&D Spending

question 133

Multiple Choice

The table shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 8 percent. What will be the marginal cost and the marginal benefit of the optimal amount of R&D spending?

• A)MC = 8 percent; MB = 6 percent
• B)MC = 8 percent; MB = 8 percent
• C)MC = 6 percent; MB = 8 percent
• D)MC = 6 percent; MB = 6 percent

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Definitions:

Recycle

The process of collecting and processing materials that would otherwise be thrown away as trash and turning them into new products.

Nutrients

Substances that provide nourishment essential for growth and the maintenance of life.

Keystone Species

Species whose activities significantly affect community structure.

Secondary Extinctions

Refers to the loss of species due to the extinction of another, indicating a dependency between species within an ecosystem.