A Doctor May Order More Tests Than Necessary for a Patient.This

question 27

Multiple Choice

A doctor may order more tests than necessary for a patient.This reflects which of the following problems?

• A) symmetric information
• B) diminishing returns
• C) adverse selection
• D) principal-agent problem
• E) market failure

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Definitions:

Specialize In Producing

The practice in which individuals, companies, or countries focus on the production of a limited scope of products or services to gain greater degrees of productive efficiency within an overall system.

Trade

The exchange of goods, services, or both between two or more parties, wherein each party benefits from the transaction.

Opportunity Cost

The expense associated with missing out on the second-best choice when deciding or selecting a course of action.

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