The total amount that the U.S. government spends to support a covered type of health care service under the Medicare system equals

A) the per-unit subsidy provided to producers of that service times the quantity of the service demanded by consumers at a below-equilibrium out-of-pocket price of the service.
B) the per-unit subsidy provided to producers of that service times the equilibrium quantity of the service demanded at the market clearing price that would arise in the absence of Medicare.
C) the below-equilibrium, out-of-pocket price that consumers pay for the service times the quantity of the service provided by producers at that out-of-pocket price.
D) the below-equilibrium, out-of-pocket price that consumers pay for the service times the quantity of the service demanded by consumers at that out-of-pocket price.


Answer: A

Economics

You might also like to view...

Why are people more inclined to pick up a dime off the pavement in a parking lot, but not so inclined to dig three feet into the earth for a previously-buried dime?

A) The entrepreneurial spirit of Americans is gone. B) They don't know the value of the dollar—or dime—anymore. C) They weigh the expected additional costs and benefits, and choose accordingly. D) People haven't taken enough economics in college.

Economics

Special Grapes is a new wine company that wants to locate its vineyard in Sonoma Country, California, an exclusive area of the world for wineries. Which of the following will likely have the largest effect on Special Grapes' input prices?

A) land prices in Sonoma County, California B) compensating wage differentials C) traffic regulations in Sonoma County, California D) the additional wages Special Grapes will have to pay its employees to work in Sonoma County, California

Economics

Which of the following statements is true about the trends in the flow of international trade witnessed in India since its independence?

a. Trade liberalization was unable to boost India's economy in the first few decades of independence. b. Indian software exports now reflect an annual growth rate of an impressive 55 percent. c. The opening of trade and modern telecommunications allowed India's production set to expand and gain comparative advantage in software. d. Trade has enabled Indian engineers to command higher wages than most other nations specializing in software.

Economics

If the price of cheese falls by 1 percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese is equal to:

A. 0.333. B. 0.30. C. 30. D. 3.

Economics