Assume that health insurance pays three-fourths of the cost of health care. Under this type of system, there will be allocative:
A. Efficiency because consumers pay a price below market equilibrium and receive a quantity at which the marginal cost to society equals the marginal benefit
B. Efficiency because consumers pay a price below market equilibrium and receive a quantity at which the marginal benefit to society exceeds the marginal cost
C. Inefficiency because consumers pay a price below market equilibrium and receive a quantity at which the marginal cost to society exceeds the marginal benefit
D. Inefficiency because consumers pay a price above market equilibrium and receive a quantity at which the marginal benefit to society exceeds the marginal cost
C. Inefficiency because consumers pay a price below market equilibrium and receive a quantity at which the marginal cost to society exceeds the marginal benefit
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The Arrow impossibility theorem explains
A) why government regulation of private markets will always result in a reduction in economic efficiency in these markets. B) why voters are always rationally ignorant. C) why there is no system of voting that will consistently represent the underlying preferences of voters. D) why it is not possible to provide the economically efficient amount of any public good.
In the short-run macro model, a decrease in the money supply will
a. lower the interest rate, increase spending, and increase GDP b. lower the interest rate, reduce spending, and lower GDP c. raise the interest rate, increase spending, and increase GDP d. raise the interest rate, reduce spending, and lower GDP e. raise the interest rate, reduce spending, and increase GDP
Imagine that you are on the economic development council of an LDC. You propose that the government invest in an herbal shampoo factory to make use of your country's abundant herbs. What type of development strategy is this? How do you expect it to help your country advance?
Any two goods are said to be _____ if they are consumed jointly in a specific proportion
a. perfect complements b. merit goods c. perfect substitutes d. public goods