Institutions and Laws, Such as Patent Protection, That Foster Innovations

question 160

Multiple Choice

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

• A) allow the government control of the innovations.
• B) give confidence to inventors that they will profit from their innovation.
• C) give confidence to consumers that the products they buy are safe.
• D) give businesses loans to buy new machinery.

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Definitions:

Factory Overhead Allocation

The process of distributing indirect manufacturing costs, such as utilities and rent, across various products based on a predetermined rate or method.

Service Companies

Businesses that provide services to consumers or other businesses rather than producing goods.

Activity-Based Costing

A pricing approach that allocates overhead and indirect expenses to associated goods and services according to their consumption of resources.

Product Costs

Costs that are directly associated with the creation of a product, including materials, labor, and manufacturing overhead.