Question

Suppose the government has enacted policies to influence the amount of good x that is supplied. These policies are most likely to improve the allocation of resources if good x is ________.a. basic research.

b. a congested toll road.
c. clothing.
d. spinach.

Answer 1

a. basic research

Step-by-step explanation:

The more (less) sensitive a good's quantity supplied to a change in its price, the more elastic (inelastic) the supply of a good the more (less) effective the government's policy to influence the quantity supplied. Out of the listed options, Basic Research is the most elastic in supply.