Which Is NOT a Strategy Used by HMOs to Keep

question 34

Multiple Choice

Which is NOT a strategy used by HMOs to keep shareholders happy?

• A)HMOs avoid covering sick people and people who are likely to get sick.
• B)HMOs try to minimize the cost of treating sick people.
• C)HMOs keep overhead charges high.
• D)HMOs work hand in hand with government subsidized health care agencies.
• E)All of the above are strategies used by HMOs.

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Definitions:

Consumer Equilibrium

The point at which the quantity of goods and services a consumer chooses to buy equates to the maximum satisfaction or utility for their budget.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods.

Consumer Equilibrium

The point at which an individual's income is perfectly balanced with their consumption preferences, maximizing utility.

Total Utility

The total satisfaction received from consuming a given total quantity of a good or service.