Overview
Read Chapter 2 Innovation from The Economics of Public Issues 20th edition by Miller, Benjamin and North. Then answer the essay questions. It’s a writing assignment so writing counts. Your answers should be complete, not just one or two sentences.
1) A. In your own words, summarize the most important points of this chapter in a paragraph. B. What insight does the chapter give that you think most people wouldn’t know?
2) Many people in the United States complain about pharmaceutical companies which they sometime refer to as “Big Pharma.” Pharmaceutical companies are often able to charge high prices for their drugs because the drugs are patented. What would be the advantage(s) and disadvantage(s) of eliminating patents for pharmaceuticals?
3) Most economists advocate free trade. By this they mean countries should trade with each other without tariffs (taxes) or barriers. Should the U.S. engage in free trade with countries that do not respect U.S. patents (or say they do but then illegally copy U.S. technology)? What would be the costs and the benefits to the U.S. if we banned trade with any country that does not respect our patent laws?