Because Knowledge Capital Is Nonexcludable and Nonrival,firms Have an Incentive

question 62

Multiple Choice

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ on the research and development of other firms.

• A) make bids
• B) not use
• C) ignore
• D) free ride

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Definitions:

Model Business Corporation Act

A standardized set of laws that serve as a blueprint for state legislatures to regulate the formation, operation, and dissolution of corporations.

Corporation Power

The legal and operational capabilities granted to a corporation by law, allowing it to conduct business, enter contracts, and own assets.

Minority Shareholders

Individuals or entities that own less than 50% of a company's shares, thereby having less control over company decisions.

Supermajority Voting

The board needs more than a simple majority of directors to vote in favor of an action before the action is possible; for example, it may require a 2/3 or unanimous vote prior to action.