The Efficiency Argument for Government Provision of Health Care Is

question 4

Multiple Choice

The efficiency argument for government provision of health care is that

• A)many poor people could not afford health care if they had to pay for it.
• B)the government is best able to assess the level of provision for which marginal cost equals marginal benefit.
• C)the government can provide health care up to that point where marginal benefit is zero.
• D)a healthy population is important to the smooth functioning of a country and its economy.
• E)health care cannot be efficiently provided by private firms.

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource.

Dual Labor Market Theory

An economic theory that suggests the labor market is divided into two segments: the primary market, with secure, well-paid jobs, and the secondary market, characterized by low pay, job insecurity, and little room for advancement.

Backward-Bending

Refers to the backward-bending supply curve of labor, indicating that at some point, higher wages lead to a decrease in the labor supply.

Labor Supply Curve

A graphical representation showing the relationship between the wages offered and the quantity of labor that workers are willing to supply.