a. Invention:
i. Thoroughly and completely explain Invention.
ii. Distinguish between invention as a process and invention as a result
and give 2 examples of each.
iii. The case of a slow growth / no growth economy.
1. We live on a planet with finite resources which makes
continued economic growth difficult to maintain. Please
explain how invention as a process and invention as a result
might be impacted by a slow growth /no growth economy.
iv. What can we do to cause Invention to happen in a slow growth / no
growth economy? Be specific.
b. Innovation.
i. What is it?
ii. For each of the types of innovation covered in the slides and audio:
1. Provide 2 examples of each (that were not included in the
slides or audio) and explain why these are good examples of
those types of innovation.
2. For each of your examples explain how these two types of
innovation were used to drive up profits.
a. Discuss the 2 key factors required to drive up profits
(drive down costs and drive up revenues). Include
explanation of how new products gain customer
acceptance, including the importance of the relationship
between price and utility.
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otherwise noted.
iii. The case of a slow growth / no growth economy.
1. Explain how our ability to do process and product innovation
might be impacted by a slow growth / no growth economy,
and what we can do about the problem.
c. Diffusion.
i. Define it,
ii. Explain how it works,
iii. Give 3 examples involving firms that have lead diffusion of some
innovation and why these represent good examples of diffusion,
iv. The case of a slow growth / no growth economy.
1. Discuss how diffusion might be affected by a slow growth / no
growth economy.
d. You work for Mr. Elon Musk and he has asked you to explain how his
company can determine its optimal level of R&D spending.
i. Please explain the general concept of optimal level of R & D
spending
ii. List and explain the marginal cost and marginal benefit components.
1. You have a good list of items in the slide set – just need to
provide explanations of the items.
iii. Explain how the optimal level of R & D spending is computed.
1. Feel free to use graphs to support your explanation.
2. Don’t forget to let him know that returns are expected, not
guaranteed.
2. Technology, R & D, and Efficiency.
You are a business manager for Coca Cola and some new competitive soft
drinks are being introduced with great customer acceptance.
a. Fast second strategy.
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otherwise noted.
i. Explain the fast second strategy.
i. Explain why and how Coke could use the fast second strategy to
increase its economic profit using 2 examples.
b. Explain to your boss how Coke can use the protection provided by patents,
copyrights, and trademarks to increase their economic profits of the
company.
i. Discuss what each of the 3 protections apply to, and
ii. Discuss how each will help a firm achieve economic profits.
c. Explain to your boss how Coke can use their Brand to increase their
economic profits.
i. Discuss the following and how each can be used to increase a firms’
economic profit:
1. Brand-name recognition
2. Brand equity
3. Brand promise
4. Brand personality
d. Explain to your boss how technological advance increases productive
efficiency and allocative efficiency.
i. Discuss the impact of technological advancements on productive and
allocative efficiency.
3. The demand for resources
a. You are an Economics teacher. Please explain to your class the
significance of resource pricing on resource allocation among firms and
industries,
b. Please explain to your class the significance of resource pricing on the
determination of income,
c. Resource pricing impact on firms
i. Explain how resource prices affect the ability of firms to acquire
resources and the subsequent impact on output,
ii. Explain the impact of resources prices on the ability of firms to
minimize costs.
d. Explain to the class the marginal productivity theory of resource demand
and why businesses care about it.