Is basic research excludable? Is it rival in consumption? How do we classify basic research in terms of the four types of goods?
Basic research is neither excludable nor rival in consumption, so it is a public good.
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A price ceiling will increase the amount that is traded in the market while a price floor will reduce the amount that is traded in the market
Indicate whether the statement is true or false
In Figure 5-2, compare demand curve D between points F and G to demand curve D' between points J and K. Which of the following statements is correct?
Figure 5-2
a.
Both demand curves have the same slope, but D' is more elastic in the $2 to $3 range.
b.
Both demand curves have the same slope, but D' is less elastic in the $2 to $3 range.
c.
Both demand curves have the same price elasticity of demand, but D' has a larger slope.
d.
Both demand curves have the same price elasticity of demand, but D' has a smaller slope.
e.
Both demand curves have the same slope and the same value for the price elasticity of demand.