Examples of research and development in the following topics:
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- The government can establish intellectual property laws, directly conduct research, or finance research and development.
- The government has the ability to encourage or discourage research and development.
- Thus, research and development can improve productivity or simply improve the welfare of society.
- The government also finances research and development that it does not directly conduct.
- The moon landing was the result of research and development conducted directly by a government agency.
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- Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices.
- The most important barriers are economies of scale, patents, access to expensive and complex technology, and strategic actions by incumbent firms designed to discourage or destroy new entrants.
- For example, microprocessing companies face high research and development costs before possibly making a profit.
- Pharmaceutical manufacturers are one type of company that generally rely on patents, which makes competition irrelevant for a period of time after development: competitors can't legally begin manufacturing the product until the patent expires.
- Manufacturing commercial airplanes takes a very large initial investment in technology, equipment, and licensing.
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- The government creates legal barriers through patents, copyrights, and granting exclusive rights to companies.
- The patent provides incentives (1) to invent in the first place, (2) to disclose the invention once it is made, (3) to make the necessary investments in research and development, production, and bringing the invention to market, and (4) to innovate by designing around or improving upon earlier patents.
- When a patent expires and the invention enters the public domain, others can build on the invention.
- This allows the company to recoup the cost of developing this particular drug.
- Though other forms of copy prevention aren't prohibited, requiring Macrovision effectively gives it a monopoly and prevents more effective copy prevention methods from being developed.
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- Health care can impact people beyond the person receiving and the person providing the care, causing positive and negative externalities.
- Health Affects Wealth: Healthy workers are absent from work less and are more productive workers.
- Technology and Information: The study of health care, and the research involved in generating new solutions, has dramatically increased the knowledge and technological capacity of society in general.
- This has affected other industries, as research and development in health care affects the technological efficacy in other markets.
- Vaccinations: An interesting new development in health care is the advent of vaccines.
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- Many American companies also have joined in cooperative research and development activities.
- Traditionally, companies conducted cooperative research mainly through trade organizations -- and only then to meet environmental and health regulations.
- But as American companies observed foreign manufacturers cooperating in product development and manufacturing, they concluded that they could not afford the time and money to do all the research themselves.
- Some major research consortiums include Semiconductor Research Corporation and Software Productivity Consortium.
- By 1999, IBM also agreed to develop new computer technologies jointly with Dell Computer, a strong new entry into that market.
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- The regulation of practices that affect the environment has been a relatively recent development in the United States, but it is a good example of government intervention in the economy for a social purpose.
- The EPA sets and enforces tolerable limits of pollution, and it establishes timetables to bring polluters into line with standards; since most of the requirements are of recent origin, industries are given reasonable time, often several years, to conform to standards.
- The EPA also has the authority to coordinate and support research and anti-pollution efforts of state and local governments, private and public groups, and educational institutions.
- Regional EPA offices develop, propose, and implement approved regional programs for comprehensive environmental protection activities.
- This type of pollution is believed to cause serious damage to forests and lakes, particularly in the eastern part of the United States and Canada.
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- Economists study how economic and natural systems interact in order to develop an efficient economy.
- As a field of academic research, natural resource economics addresses the connections and interdependence between human economies and natural ecosystems.
- Additionally, research topics of natural resource economists can include topics such as the environmental impacts of agriculture, transportation and urbanization, land use in poor and industrialized countries, international trade and the environment, and climate change.
- Depletion: the using up of natural resources, which is considered to be a global sustainable development issue.
- The findings of economists help governments and organization develop measures of protection to sustain natural resources.
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- An agricultural subsidy is defined as a government grant paid to farmers to supplement income and influence the overall cost and supply of certain commodities.
- Consumers are not charged tax on food goods and clothes, which are considered necessities and thus should be provided at the lowest costs possible.
- Developing Nations: A complement to the above discussion is the effect on poverty and developing nations without the infrastructure to provide subsidies for their own farmers.
- The International Food Policy Research Institute has estimated a total loss of economic growth in developing nations at $24 billion in 2003, all of which translate to lost income for individuals who desperately need it.
- Nutrition: Another interesting side effect of subsidies and the artificially reduced price of food is obesity and overeating.
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- Macroeconomics is a branch of economics that focuses on the behavior and decision-making of an economy as a whole.
- Macroeconomics is a branch of economics that focuses on the behavior and decision-making of an economy as a whole .
- Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions and develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, government spending, and international trade.
- While macroeconomics is a broad field of study, there are two areas of research that are especially well publicized in the media: the evaluation of the business cycle and the growth rate of the economy.
- Though macroeconomics encompasses a variety of concepts and variables, but there are three central topics for macroeconomic research on a national level: output, unemployment, and inflation.
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- Macroeconomists focus on the national, regional, and global scales.
- Equitable distribution of income and wealth among the economy's participants.
- To achieve these goals, macroeconomists develop models that explain the relationship between factors such as national income, output, consumption, unemployment, inflation, savings, investment and international trade.
- On the national level, macroeconomists hope that their models help address two key areas of research:
- the causes and consequences of short-run fluctuations in national income, otherwise known as the business cycle, and