Consider the figure to the right and assume that it is the market for health-care services. when the "baby boomer" generation retires, the number of people who require health care increases by 30%, and, as a result, the number of health-care providers also increases, but by only 25% What is the effect on the price of health care services over time?
A. it increases because demand increases by more than supply
B. it decreases because demand increased by less than supply
C. it increases because demand increased by less than supply
D. it decreases because demand increased by more than supply
Ans: A. it increases because demand increases by more than supply
You might also like to view...
A scooter uses much less gasoline than does a car. Suppose the price of gasoline rises substantially. Which of the figures above best illustrates how this change affects the demand curve for scooters?
A) Figure A only B) Figure B only C) Figure C only D) Figure D only E) Both Figure A and Figure D
When Lorenzo eats 1 slice of pizza for lunch, his total utility is 23, and when he eats 2 slices of pizza for lunch, his total utility is 42. Assuming that Lorenzo's marginal utility from eating pizza is always positive, we can infer that his total utility from eating 3 slices of pizza at lunch is:
A. greater than 42 and less than 46. B. greater than 23 and less than 42. C. greater than 42 and less than 61. D. greater than 42 and less than 84.