The Economic Efficiency Argument for Patents Is To

question 39

Multiple Choice

The economic efficiency argument for patents is to:

• A)ensure the profitability of firms with patent protection.
• B)enable people and firms to internalize the external benefits of their inventions.
• C)raise sufficient revenue for the firms so that they can at least break even.
• D)ensure that the benefits of discoveries and inventions are entirely transferred to society at-large.

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Definitions:

Stockholders' Equity

The portion of the balance sheet that represents the capital received from investors in exchange for stock (paid-in capital), donated capital and retained earnings of a company.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specific period.

Bond Retirement

The process of paying off bond issuance at maturity or through an early buyback, removing the bonds from circulation.

Par Value

Par Value is the nominal or face value of a stock or bond, as stated by the issuer, and has little relation to its market value.