What Effect Have Medicare Subsidies Had on the Consumption of Medical

question 153

Multiple Choice

What effect have Medicare subsidies had on the consumption of medical services?

• A) The consumption of medical services has been unaffected, because people don't consider the financial cost when seeking services related to their health.
• B) The consumption of medical services has been unaffected, because government restrictions have prevented patients from seeking a level of care above and beyond what they would choose if they had to pay for medical treatment out of pocket.
• C) The consumption of medical services has increased because Medicare subsidies give people the incentive to seek more care than they would otherwise.
• D) The effect cannot be measured because it is difficult to quantify the amount of resources devoted to our health care system.

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Definitions:

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the return (net profit) divided by the cost of the investment.

Flexible Budget

A budget that modifies in response to fluctuations in activity levels or volume within an enterprise.

Manufacturing Costs

The total costs involved in making products which can include direct materials, direct labor, and manufacturing overhead.

Direct Material

These are the raw materials and components that are consumed directly in the manufacture of a product.