Innovation Flashcards

1️⃣ Familiarise yourself with the flashcards:

  • Look through all the flashcards to see what's on both sides.
  • Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

  • Look at the question or prompt on each card and try to remember the answer before flipping it over.
  • Check the answer and make a note of any cards you find challenging and need to go over more.

3️⃣ Consistently Review and Practice:

  • Use spaced repetition: spend more time on the cards you struggle with and go over them more often.
  • Regularly review all the flashcards to help you better understand and retain the information over time.

Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What does innovation mean in economics?

Creating new or improved products or ways of producing them.

What is the difference between product and process innovation?

Product innovation makes new goods or services; process innovation improves how they are made or delivered.

How can innovation increase productivity?

It helps workers produce more in each hour, using the same resources.

How can innovation affect a firm's costs?

It can cut costs by making production faster or less wasteful.

How can innovation help a country grow?

It raises output per worker, so total output and incomes can rise.

What is research and development (R&D)?

Work to create and test new ideas, products, or processes.

Name two government policies that can encourage innovation.

R&D tax credits and patent protection.

What is a patent and how does it help innovation?

A legal right to stop others copying an invention, so the inventor can earn money from it.

How can innovation improve international competitiveness?

It can lower costs or raise quality, so exports sell better in world markets.

Why can innovation take time to boost the economy?

New ideas need time to develop, be adopted by firms, and spread.

How can competition encourage innovation?

It pushes firms to improve to win and keep customers.

What is one risk of innovation for firms?

High upfront costs and a chance the project fails.