Which of the following best describes the effect of a negative incentive?

Firms can create value by

A) creating a brand name. B) by offering guarantees. C) by offering warranties. D) all of these choices.

Defensive medicine refers to the idea that:

A. it is more cost-efficient to prevent illnesses than to cure them. B. physicians may require unnecessary testing as a means of protecting themselves against malpractice suits. C. doctors know much more about diagnosing and treating illnesses than do health care consumers. D. physicians do not advertise their services or fees.