Question 2 4 pts Which of the following helps in determining whether health care

Question

Question 2 4 pts Which of the following helps in determining whether health care cost rises because of government policy, or because of demand rising faster than supply? Examining the market for health care away from the belief that the market outcome is unfair Examining the changes in the price of health care products Examining the allocation systenm Examining the changes in the number of suppliers of health care in the market Examining the market for health care with the belief that the market outcome is unfair Question 3 4 pts In which of the following situations will the price of medical care decrease with an increase in its demand? When there is an increase in the price of resources used to produce medical care When the supply of medical care increases more than the demand for medical care When there is an increase in future profit expectations When the supply of medical care is the same as the demand for medical care

Explanation / Answer

2) When people believe that market outcome is fair that is supply and demand equal. So when demand will be increased, the price also will be increased. So if people examine the market away from the belief that market outcome is unfair then the cause of rising health care cost is demand rise faster than supply. Therefore the first option is correct.

3) When demand for medical care is increased, the price will be increased according to the law of demand. But if the supply of medical care is increased, the price of medical care will be reduced. Now if supply increases more than the increase in demand, the price will be reduced. The second option is correct.

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