Innovation, Patents & Technology: Checkpoint 1

Quick checkpoint - five questions on ideas, patents, research funding, creative destruction and technology diffusion.

Question 1 of 5 What does it mean that ideas are non-rival?

Ideas cannot be patented Many people can use the same idea at the same time without using it up Ideas are always free Only one company can use an idea

Non-rivalry is what makes ideas such a powerful driver of long-run growth.

Question 2 of 5 In most countries today, how long does a patent last?

5 years 20 years from filing The inventor's lifetime Forever

The World Trade Organization's rules set a standard term of 20 years from the filing date.

Question 3 of 5 Why do governments fund much basic research?

Because companies are banned from doing it Because its payoffs are uncertain, distant and hard to keep private, so companies tend to underinvest Because basic research is cheap Because it always produces products quickly

The benefits of basic research spill over widely, so private firms capture too little of them.

Question 4 of 5 Who described capitalism as a process of creative destruction?

Adam Smith Joseph Schumpeter John Maynard Keynes Karl Marx

Schumpeter used the phrase in 1942 to describe new products and firms replacing old ones.

Question 5 of 5 Why did electricity take decades to raise factory productivity?

Electricity was too expensive to use at all Factories had to be completely redesigned around small electric motors before the gains appeared Workers refused to use electric machines Electric motors did not work until the 1920s

Simply swapping a steam engine for one large electric motor brought little gain; redesigning factories did.

← Back to General-Purpose Technologies: Steam, Electricity and Computers Next lesson → Why Innovation Clusters: Silicon Valley and Beyond

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