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james o'Connor
on Dec 11, 2024

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Does it make any difference whether health-care expenditures are paid for by the consumer or by a third party (the government or an insurance company, for example) ?

A) No; the quantity of health-care service demanded is not influenced by either the price of health care or who is paying for it.
B) Yes; consumers of health care will have a stronger incentive to economize when they are buying the service with their own money.
C) Yes; consumers of health-care services will have a stronger incentive to economize when the services are paid for by a third party.
D) No; health care is an essential service, and therefore, the incentive to economize on it is unaffected by who is paying for the service.

Health-Care Expenditures

The total amount of money spent on health care services, including prevention, treatment, and rehabilitation.

Third Party

An entity involved in a transaction or situation who is neither the buyer nor the seller, but may have an interest or role.

Consumer

An individual or group that purchases goods and services for personal use, driving demand in the economy.

  • Recognize the effects of healthcare financing structures on healthcare costs and economic incentives.
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Eddie SweetDec 13, 2024
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