Does It Make Any Difference Whether Health-Care Expenditures Are Paid

question 60

Multiple Choice

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.

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Definitions:

Expense Accounts

Accounts used in accounting to record all expenses a company incurs during a specific period.

Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear in the financial statements after adjusting entries have been made for the accounting period.

Income Statement

A financial statement that shows a company's revenue and expenses over a specified period, leading to the net income or loss for the period.

End-Of-Period Spreadsheet

A tool used in accounting to summarize account balances and adjustments at the end of an accounting period, aiding in the preparation of financial statements.