Describe how health care insurance affects the market for health care in a simple supply and demand model
What will be an ideal response?
From a supply and demand perspective, health insurance reduces the price to the buyer below the no-insurance equilibrium price. This lower price induces more health care consumption and creates an efficiency or welfare loss for society.
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When players cannot achieve their goals because they are unable to make credible threats or promises, the situation is called a:
A. Nash equilibrium. B. prisoner's dilemma. C. failure of dominant strategies. D. commitment problem.
Classical growth theory proposes that real GDP growth is ________ and that real GDP per person will ________ the subsistence level
A) permanent; temporarily be above B) permanent; always be above C) temporary; temporarily be above D) temporary; be above and below
Which of the following is false?
a. Product liability laws can make it unprofitable to sell shoddy merchandise, providing a substantial incentive to provide safe products independent of government regulations. b. Asymmetric information exists when the available information is initially distributed in favor of one party to a transaction relative to another. c. In adverse selection situations, it is rational for a seller with more information about a product to provide a truthful and complete disclosure and make that fact known to a potential buyer. d. Moral hazard arises in part from the fact that it is costly for an insurer to monitor the behaviors of the insured party.
If a war interrupted oil production, which of the following would most likely happen in the short run?
a. Unit costs would decrease and there would be an upward movement along the aggregate supply curve. b. Unit costs would increase and the aggregate supply curve would shift upward. c. Unit costs would increase and the aggregate supply curve would shift downward. d. Unit costs would decrease and the aggregate supply curve would shift upward. e. Unit costs would increase and there would be movement along the aggregate supply curve.