How is moral hazard related to health care?
What will be an ideal response?
Moral hazard is affiliated with many insurance systems. A person who is insured will use health care services more than one who is not insured and may engage in a lifestyle that is less healthful than one with less insurance. These create greater costs to the insurance companies and the health care system. Physicians also are more likely to require tests when insurance companies pick up the costs.
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According to the law of diminishing returns, when some factors of production are fixed, in order to increase production by a given amount, a firm will eventually need to add successively:
A. smaller and smaller quantities of the variable factors of production. B. larger and larger quantities of the fixed factor of production. C. larger and larger quantities of the variable factors of production. D. constant quantities of the variable factors of production.
Human capital refers to the
A. number of workers available in the economy. B. tools and equipment available to workers. C. education, training, and skills of workers. D. amount of financing available to start-up firms.
An increase in the consumption of a good resulting from a reduction in price that makes the good cheaper in relation to other goods is called the:
a. substitution effect. b. income effect. c. real balance effect. d. inelasticity effect.
An example of an oligopoly is: a. the restaurant industry. b. the wheat market
c. the cigarette industry. d. the beef industry.