Article Summary An Organisation for Economic Co-Operation and Development (OECD) Report

question 8

Multiple Choice

Article Summary
An Organisation for Economic Co-operation and Development (OECD) report states that administration costs for health care in the United States are the highest in the developed world, accounting for over 8 percent of spending in the health care sector, compared to a global average of about 3 percent. According to the report, expensive surgeries, high pharmaceutical costs, and corrupt practices increased global health care costs, and poor coordination between health care providers, duplication of tasks, and excessive time spent on paperwork all contributed to higher administrative costs. The report also noted that administrative costs are generally lower under government-managed health care systems than with private insurance, but governments could still significantly cut spending and improve patients' health.
Source: Alanna Petroff, "U.S. health care admin costs are double the average," money.cnn.com, January 11 2017.
-Refer to the Article Summary.The article discusses the high administrative costs of health care in the United States.Even if private insurance companies were more efficient and brought administrative costs down, consumers would still pay less than the full cost of medical treatment.This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price, and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.

• A)greater; greater
• B)greater; less
• C)less; greater
• D)less; less

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Definitions:

Securities

Securities that signify holding an equity stake in a company listed on the stock market, a debt interest in a corporation or government entity through bonds, or entitlement to ownership through options.

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account, following the initial purchase, to continue holding an investment.

Initial Margin

The percentage of the purchase price of securities (like stocks, bonds) that an investor must pay for with his own cash or marginable securities when using a margin account.

Common Stock

A type of security that represents ownership in a corporation, with holders typically having voting rights and potentially receiving dividends.