Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will
a. lead to higher healthcare prices.
b. lead to lower healthcare prices.
c. reduce the incentive of consumers to economize.
d. increase the incentive of healthcare providers to provide their services at a low cost.
e. do both a and c above.
E
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An open market sale of bonds by the Federal Reserve will lead to an increase of reserves in banks
Indicate whether the statement is true or false
The concept of "opportunity cost" helps us explain the choices of
A) consumers only. B) producers only. C) greedy people only. D) politicians only. E) any individual.
As the probability of detecting shirking increases, the size of the bond necessary to deter shirking
A) also increases. B) stays the same. C) decreases. D) increases at an exponential rate.
International trade and competition from abroad
a. provide domestic producers with a strong incentive to improve the quality of their products and keep their costs low. b. will make it more difficult for domestic producers to realize fully the potential gains from economies of scale in production. c. will make it more difficult for domestic consumers in small countries to purchase from large scale producers. d. do all of the above. e. do none of the above.