Question

True or false. If the production of health care generates positive externalities, then the welfare costs...

True or false. If the production of health care generates positive externalities, then the
welfare costs of moral hazard are smaller than those suggested by M. Pauly in his analysis. Explain.


Homework Answers

Answer #1

TRUE

If the production of health care generates positive externalities, then welfare cost of moral hazard are smaller than those suggested by M.pauly

Additional consumption of health care services is labeled as a moral hazard; the costs associated with additional consumption of moral hazard can be covered by mitigating other consequences

Since conditions of maximum economic efficiency fail to hold in the market for medical care, moral hazard leads to increase in demand will raise welfare is a second-best theory.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
True or false. If the production of health care generates positive externalities, then the welfare costs...
True or false. If the production of health care generates positive externalities, then the welfare costs of moral hazard are smaller than those suggested by M. Pauly in his analysis. Explain.
1) True or false? Managed care is a new approach to financing health care with origins...
1) True or false? Managed care is a new approach to financing health care with origins in the 1990s. 2) True or false? The Agency for Healthcare Research and Quality has provided funding for quality improvement efforts in the U.S. 3) True or false? Root Cause Analysis (RCA) is designed to identify an individual who can be held accountable for a lapse in quality. 4) True or false? Plan-Do-Check-Act is a new quality improvement strategy not related to DMAIC. 5)...
a)According to wealth substitution effect, private saving increases due to social security taxes. b)Government’s health care...
a)According to wealth substitution effect, private saving increases due to social security taxes. b)Government’s health care program can solve both moral hazard and adverse selection problems. c)The only reason why countries have social security is to improve the economic status of the aged STATE whether the statement is True or False or Uncertain. explain in detail please
Paraphrase this please!! Don't use paraphrasing tool please!!!! Positive externalities lead to underproduction. Jon does not...
Paraphrase this please!! Don't use paraphrasing tool please!!!! Positive externalities lead to underproduction. Jon does not compensate Bob for the benefit of having pollinating bees nearby, so Bob produces less honey than is socially optimal. The tax on Bob’s production makes this distortion even worse by reducing production even further. Because the cost of deadweight loss increase at an increasing rate, this additional distortion is greater than if there had been no preexisting externality. In figure below, a tax on...
Answer whether the statement is True or False or Uncertain. EXPLAIN in detail. According to the...
Answer whether the statement is True or False or Uncertain. EXPLAIN in detail. According to the wealth substitution effect, private saving increases due to social security taxes. Government’s health care program can solve both moral hazard and adverse selection problems. The only reason why countries have social security is to improve the economic status of the aged. As education is a private good, the government should not provide it. Individuals always prefer cash-transfers to in-kind transfers.
STATE whether the statement is True or False or Uncertain. EXPLAIN in detail. According to wealth...
STATE whether the statement is True or False or Uncertain. EXPLAIN in detail. According to wealth substitution effect, private saving increases due to social security taxes. Government’s health care program can solve both moral hazard and adverse selection problems. The only reason why countries have social security is to improve the economic status of the aged. As education is a private good, government should not provide it. Individuals always prefer cash-transfers to in-kind transfers.
1. True or False: Efficiency is a value-laden concept 2. Health care: a. Is the most...
1. True or False: Efficiency is a value-laden concept 2. Health care: a. Is the most important determinant of health in OECD countries b. is the most expensive determinant of health in OECD countries c. spending continues to grow rapidly in most OECD countries d. sector is one of the largest sectors in most OECD countries? 3. Providing free prescription medications for all those who need them demonstrates: a. horizontal equity b. vertical equity c. procedural equity d. distributional efficiency
True or False 6. When a market reaches allocation efficiency economic welfare is maintained 7. Given...
True or False 6. When a market reaches allocation efficiency economic welfare is maintained 7. Given demand and supply, deadweight loss increases as the size of tax gets larger 8. Holding supply curve and rate of tax constant, deadweight loss is smaller when demand is more elastic 9. In production, when marginal product of the fifth worker is larger than the average product of the first four workers (APL) who have already been hired, APL increases as we hire the...
True Or False Required 1 Predetermined overhead rates are calculated after the production period when the...
True Or False Required 1 Predetermined overhead rates are calculated after the production period when the actual costs are known. Required 2 At the end of the accounting cycle, the balance of the Manufacturing Overhead account should be zero. Required 3 The change in the manufacturing environment from being labor-intensive to highly automated has had no impact on the allocation cost methods. Required 4 Jiffy Cake Mix Company, having a homogeneous product, would use process costing for its manufacture of...
True or False. (a) Effective nuclear charge (Zeff) is the positive charge experienced by the electron...
True or False. (a) Effective nuclear charge (Zeff) is the positive charge experienced by the electron from the nucleus and it increases from left to right across the period. Answer: __________ (b) Effective nuclear charge slightly decreases going down a group. Answer: __________ (c) Zeff for calcium is smaller than that of chlorine. Answer: __________ (d) Atomic radius tends to decrease from top to bottom of a group because of the increase in the principle quantum number. Answer: __________ (e)...