1.The positive externalities of education are always reflected in general society.Which of the following is not an example of a positive externality of education?

a. lower levels of crime

b. a cleaner environment

c. better health outcomes for the population

d. a higher income for a person who received a college degree fromHarvard

2.What is intellectual property?

a. the body of law that includespatents, trademarks, copyrights, and trade secret law

b. a government authorityconferring a right or title for a set period

c. the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material

d. a secret device or technique used by a company in manufacturing its products

3.While it is generally accepted thatintellectual property rights provide a method for increasing the rate of return for inventors, some economists believe there are a number of reasons to doubt whether patents provide:

a. sufficient incentives for innovation, as well as completely appropriate incentives for innovation

b. sufficient benefits to the firm that employs the inventor

c. completely appropriate benefits for the whole of society

d. all of the above

4.Which of the following does not reflect an area where government investment in research and development goes?

a. industry

b. non-profit organizations

c. universities and colleges

d. private savings accounts

5.It is not always expedient for the government to make a direct investment in an industry. Another way thatgovernmentcan support research is throughcooperative investment.Which of the following is an example of a cooperative government research investment in the U.S.?

a. United for Medical Research

b. theNational Academy of Scientists

c. theAgriculture and Food Research Initiative (AFRI)

d. all of the above

6.Which of the following as an example of a private rate of return that relates to improved health?

a. The rate of heart disease in a country decreases by7%

as aresult of a better educated population.

b. Crime rates in a major city decrease by5%

as a result of a series of initiatives to improve local public schools.

c. Taylor receives a college degree and is given a promotion and a20%

raise by her employer as a result.

d. After taking a course on nutrition in high school, Amy changed her diet and started living a healthier lifestyle with the information she learned. In doing this, she has decreased her risk of heart disease by60%.