Chapter 30: Q.c - For Critical Thinking (page 684)
Who provides the more than $100 billion that Medicare spends on prescription drugs each year?
The taxpayers provide the money.
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What do you think motivates proposals to require sellers of disposable diapers to print messages on diapers encouraging parents to tell stories for or read to their babies or young children?
Some economists have argued that if the government wishes to subsidize health care, it should instead provide predetermined amounts of payments (based on the type of health care problems experienced) directly to patients, who then would be free to choose their health care providers. Whether or not you agree, can you give an economic rationale for this approach to governmental health care funding?
Recognize the role played by third-party payments in rising health care costs and explain the key elements of and economic effects of the U.S. national health insurance program
A government agency notifies the physicians' group in Problem 30-10 that to continue providing services in the community, the group must document its activities. The resulting paperwork expenses raise the cost of each unit of health care services that the group provides. What is the likely effect on the profit-maximizing price and the equilibrium quantity of health care services provided by the physicians' group in this community?
Suppose that a group of physicians establishes a joint practice in a remote area. This group provides the only health care available to people in the local community, and its objective is to maximize total economic profits for the group's members. Explain how the price and quantity of health care will be determined in this community. (Hint: How does a single producer of any service determine its output and price?)
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