Why would the market economy produce too little healthcare?
What will be an ideal response?
The markets for healthcare will produce less than the efficient quantity because consumers of healthcare take account of only the benefits that accrue to them. They ignore the marginal social benefit that exceeds their perceived marginal benefit. Therefore the consumers' demand for healthcare is less than the marginal social benefit from healthcare so the quantity of healthcare services produced is less than the efficient quantity.
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In general, the lower the exercise price relative to the current spot rate price of the currency, the more valuable
A) the put option. B) the call option. C) the arbitrage operation. D) the triangular arbitrage.
Your bank has the following balance sheet Assets Liabilities Rate-sensitive $100 million Rate-sensitive $75 million Fixed-rate 100 million Fixed-rate 125 million What would happen to bank profits if the interest rates in the economy go down
? Is there anything that you could do to keep your bank from being so vulnerable to interest rate movements?