Question

10. People have a strong incentive to hide their true willingness-to-pay, or valuation, of a public good because taxing officials might use it to get them to pay more taxes. This is called the

a. basis for health insurance

b. free rider problem

c. problem with externalities

d. result of congestion effects

11. All of the examples listed below, with one exception, are public goods which at times might possilbly lose some of their pubic good properties when they become congested. Which example is an exception?

a. A small nonprofit clinic for homeless people funded by a charitable organization

b. Discoveries made through medical research

c. Emergency departments of nonprofit hospitals

d. A large urban nonprofit hospital

12.The primary way that the U.S. government assures health care services for senior citizens through Medicare is through

a. Financing services provided by private sector firms

b. Producing services for consumers

c. Regulating the market for some services

d. Marketing services for private producers

Answer 1

1) "Problem of externality" they believe their decision to pay for the services they are using may get them in the tax net. This is an externality of paying for government services.

2) "An emergency department of the non-profit hospital". Non Rivalrous and non-excludability are the features which make the product public, but when there is a congestion in the emergency department people are excluded and only a few can avail those services.  

3) "Financing services provided by the private sector firms"

Medicare is an insurance which is funded by the taxpayers' money, the government provides for finances for the services provided by the private sector firm.