Briefly describe the most important differences between the market for health care and the market for other goods and services
What will be an ideal response?
Doctors and hospitals that supply most health care are primarily private firms, as is true in the market for other goods and services, but with health care, the government also provides some services directly through the Veterans Health Administration, and indirectly through Medicare and Medicaid. In the market for other goods and services, consumers pay the full market price, but in the market for health care, a typical consumer does not pay the full price because of health insurance.
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Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To save money she operates her business out of a small building she owns which, until she started her own business, she had rented out for $10,000 per year
She also invested her $20,000 savings (which earned a market interest rate of 5% per year) in her business. You are given the following information about the first year of her operations. Total revenue $120,000 Cost of labor 40,000 Cost of materials 15,000 Equipment rental 5,000 a. Calculate her economic costs. b. Calculate her accounting costs. c. Calculate her implicit costs. d. Sally tells you that she would really like to move to a location closer to town but she decided against it because "right now I don't pay any rent and it will cost me $10,000 a year to rent near town." Do you agree with her reasoning?
Choosing optimal user fees for government produced services is similar to choosing optimal taxes.
A. True B. False C. Uncertain
In Adam Smith's competitive market economy, the question of what goods to produce is determined by the:
a. "invisible hand" of the price system. b. "invisible hand" of government. c. "invisible hand" of public interest. d. "visible hand" of laws and regulations.
In 2005, developed countries began to offer "aid for trade" programs that:
A. fund initiatives in developing countries that minimize trade barriers and provide infrastructure critical for trade. B. give developing countries funds to develop industries that create exports the developed nations want. C. give developing nations funds in exchange for free trade agreements. D. give developing nations funds in exchange for cheaper imports.