If the production of computer chips yields greater technology spillovers than the production of potato chips, the government should
A)encourage the production of computer chips with subsidies.
B)discourage the production of potato chips with taxes.
C)encourage the production of potato chips with subsidies.
D)discourage the production of computer chips with taxes.

Question

Quizplus · Accepted Answer

Technology spillovers are benefits that accrue to others when a firm invests in innovation, leading to broader societal benefits beyond the firm's own profits. Subsidizing industries with high spillovers, like computer chips, can encourage more investment in these beneficial technologies, enhancing overall economic growth and innovation.

If the Production of Computer Chips Yields Greater Technology Spillovers