Which of the following is not a rationale for government involvement in health care markets?
a. Government involvement is necessary to prevent the spread of contagious diseases, which are type of externality.
b. Government involvement is necessary to provide individuals with information on the quality of health care by regulating drugs and physicians.
c. Government involvement is necessary to ensure that physicians do not form illegal cartels to restrict entry into medicine in order to increase profits.
d. Government involvement is necessary to ensure that everyone has health insurance and thus can gain access to health care.
c
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A firm in short-run equilibrium always earns positive profits if
a. AC > P > AVC. b. AR > AC. c. MR = MC. d. AC > MC.
Which statement about the discount rate is true?
a. A small change in the discount rate has a huge impact on the available money in the economy. b. The Fed often changes the discount rate several times in a single year. c. The discount rate impacts the amount of reserves that a bank must have on hand. d. It is a very important tool because banks rely heavily on being able to borrow from the Fed.