What is the relative importance of demand and supply factors in explaining rising health care costs?
What will be an ideal response?
The most likely explanations for the rise in health care costs are (1) the use of new medical technology, (2) medical ethics, (3) fee-for-service payment, and (4) a third-party system of insurance payments with few incentives to control costs. Only a relatively minor portion of the increase in health care costs can be attributed to increasing incomes, the aging of the population, or defensive medicine.
You might also like to view...
Discuss the short-run and long-run views of PPP. Make sure that you explain the underlying adjustment mechanism and theoretical reasoning for each view when answering the question
Which view, do you think, is more likely to represent the real world?
A firm experiencing constant economies of scale will have a long-run average cost curve that is:
a. upward sloping b. vertical c. downward sloping d. horizontal