Assume that constant returns to scale exists and that N and K both decrease by 3%. Given this information, we know that

Refer to Figure 7-6. Answer the following questions:

1. What would be the equilibrium price and quantity if consumers had to pay the full price of medical services? 2. With insurance acting as a third-party payer, what price will consumers pay for medical service? 3. With insurance acting as a third-party payer, what price will doctors receive for medical service? 4. With insurance acting as a third-party payer, what will be the equilibrium quantity of medical services? 5. With insurance acting as a third-party payer, what will be the value of the deadweight loss?

The United States appears at times to have a totally schizophrenic attitude toward protectionism

The United States was the country that proposed the establishment of the World Trade Organization as early as the late 1940s, and was also the only industrialized country that refused to ratify this at that time. The United States has consistently argued on the side of multinational free trade in GATT Rounds, and yet maintains many protectionist laws such as those which reserve oil shipments from Alaska to U.S. flag carriers. How can you explain this apparent lack of national consistency on this issue?