Why does the government intervene in the market for research, especially medical research?
What will be an ideal response?
The usual justification for government involvement in research in general, and in medical research in particular, is that research and innovation create positive externalities,but much of the social value of these innovations does not accrue to the innovating firm. This means that although research has a high social value, private firms do not have an incentive to invest in costly research and development. The government steps in to subsidize research so that private firms continue to invest in research and innovation.
A-head: ECONOMICS OF HEALTH
Concept: Government intervention in health markets
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The LM curve will become steeper when
a. there is a larger money demand increase per unit increase in income. b. money demand is less sensitive to the interest rate. c. money demand is more sensitive to the interest rate. d. Both a and b e. Both a and c
Explain bundling and mixed bundling and the benefits to a multi-product monopolist of such packaging schemes.
What will be an ideal response?
The coefficient of the price elasticity of demand is always negative
a. True b. False Indicate whether the statement is true or false
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