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Answer the following questions.
a. Some health analysts believe that physicians try to increase their income by inducing demand for their services. For example, physicians may order unnecessary tests and treatments. Why would patients willingly accept these additional tests and treatments?
b. If physicians did not need a license to practice medicine, what market institutions would help mitigate the lemons problem?
c. How does the Internet, which makes freely available all sorts of information about diseases and their treatments, affect the physician-patient relationship?
Marginal Utility
The additional satisfaction or utility that a consumer receives from having one more unit of a good or service.
Marginal Utility
The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.
Consumer Surplus
The difference between what consumers are willing to pay for a good or service versus what they actually pay.
Demand Curve
A graphical representation that shows the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.
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