Why Would Knowledge Capital Exhibit Increasing Returns for an Entire

question 75

Multiple Choice

Why would knowledge capital exhibit increasing returns for an entire economy, but not for an individual firm?

• A)Its non-rival nature means small gains in productivity can be enjoyed by thousands of firms at once.
• B)Its non-rival nature means that firms must compete to enjoy the benefits fo knowledge capital.
• C)Its non-excludable nature means that firms have an extra incentive to produce knowledge capital.
• D)Its non-excludable nature means that use by one firm does not reduce the benefit of knowledge capital to another.
• E)Its non-excludable nature means that small gains in productivity cannot be captured by just one firm.

---

Definitions:

Reinforcement Principles

Psychological concepts that involve strengthening a behavior by providing a desirable consequence or removing an undesirable one.

Stimulus Generalization

The process by which a conditioned response is triggered by stimuli that are similar but not identical to the original conditioned stimulus.

White Rats

Laboratory rats, often of the albino variety, used in research and experiments.

Classical Conditioning

In this learning approach, two stimuli are repeatedly linked, and a reaction that starts out being caused by the second stimulus is in time caused by just the first stimulus.