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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Jane is a top-level executive and is very rich. Jane just ordered a car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is true?
A) The car is not a scarce good. B) The car is a scarce good. C) Because Jane has unlimited funds, she incurs no opportunity cost in buying the car. D) Jane paid too much for a car that wasn't ready on time
What are four inefficiencies of a barter system?
What will be an ideal response?
Prospect theory can explain why
A) people tend to gamble on long odds with small expected utility. B) people tend to sell their losing stocks and keep their winning stocks. C) people should only sell their losing stocks. D) people should never play the lottery.
If the government imposes a price ceiling below the market equilibrium price, which of the following will result?
a. There will be a surplus of the good. b. The quantity demanded will exceed the quantity supplied. c. The quantity supplied will exceed the quantity demanded. d. The demand curve will shift to the left.