The text states that private firms will not undertake the efficient amount of basic scientific research.

a. Explain why this is so. In your answer, classify basic research into one of the types of goods covered at the start of the chapter.

b. What sort of policy has the UK adopted in response to this problem?

c. It is often argued that this policy increases the technological capability of British producers relative to that of foreign firms. Is this argument consistent with your classification of basic research in part (a)?