Economic Theory Indicates That as a Larger Share of Medical

question 180

Multiple Choice

Economic theory indicates that as a larger share of medical services are paid for by a third party (for example, insurance companies or the government) rather than directly by the consumer,

• A) consumers will have a stronger incentive to economize.
• B) consumers will have a weaker incentive to economize and the prices of medical services will rise more rapidly than would otherwise be the case.
• C) consumers will have a weaker incentive to economize, but medical service suppliers will have a stronger incentive to keep prices low.
• D) the suppliers of medical services will have more incentive to economize.

---

Definitions:

Technological Advance

The process of developing new and better ways of doing things, particularly in areas like science, engineering, and manufacturing.

Invention

An invention is a unique or novel device, method, composition, or process that extends the boundaries of human knowledge or capability.

Innovation

Converting a thought or discovery into a valuable offering or solution that attracts customer investment.

Patents

Legal documents granted by governments that give inventors exclusive rights to their inventions for a certain period, protecting their intellectual property and preventing unauthorized use.