Congress expects Social Security and Medicaid to fall short of revenue that will be needed to cover promised benefits in the future. On what evidence are these expectations based?
Medicare claims are expected to grow rapidly over the next forty years for two reasons. First, our
population is aging and older people have greater health-care needs. Second, new health-care technologies
are available in medicine that make it possible to invest ever greater sums in the health needs of the senior
population. Also, the ratio of working people to retirees has fallen considerably, while the standard of
living of retired people has risen. This means that fewer workers will shoulder an increasingly larger Social
Security tax burden.
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In the health insurance market, adverse selection occurs when
A) chronically ill people buy health insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) people with health insurance tend to behave more recklessly.
A binding price floor:
A. will cause quantity demanded to exceed quantity supplied. B. will cause quantity supplied to exceed quantity demanded. C. will increase total well-being. D. will set a legal maximum price in a market.
Experience rating systems for pricing insurance discourage firms from spending money to try to improve their employees' health.
Answer the following statement true (T) or false (F)
Which of the following is not a characteristic of a monopolistically competitive market?
A. There is only one firm selling a product. B. There are many firms selling products that are similar but not identical. C. There are many firms that have some control over price. D. There are no artificial barriers to entry.