When Price Is Presented in a Clear and Easy to Understand

question 68

Multiple Choice

When price is presented in a clear and easy to understand manner, consumers have been found to:

• A) still follow their doctors advice as to where to seek care
• B) be willing to trade-off hospital brand name and distance if it will save them money
• C) trade off brand name of the hospital if it is within ten miles
• D) check the quality ratings of the hospital and ask their doctor

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Definitions:

Desert Island

An uninhabited or deserted island, often depicted in literature and movies as a remote, isolated place.

Competitive Equilibrium

A market state where supply equals demand, and no economic agents have the incentive to change their behavior.

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods according to the level of satisfaction or happiness they provide.

Endowed

Provided with a quality, ability, or asset; often used in the context of endowed chairs in academia or endowed grants/funds.