A Doctor May Order More Tests Than Necessary for a Patient.This

question 27

Multiple Choice

A doctor may order more tests than necessary for a patient.This reflects which of the following problems?

• A) symmetric information
• B) diminishing returns
• C) adverse selection
• D) principal-agent problem
• E) market failure

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Definitions:

Surplus

A situation where the quantity supplied of a good or service exceeds the quantity demanded at the current price, often leading to a decrease in prices.

Balance of Trade

The difference in value between a country's imports and exports over a certain period.

Money Inflows

Money inflows refer to the incoming funds to a business, organization, or economy from various sources such as investments, sales, and loans.

Protectionism

A government policy to protect domestic industries and producers by restricting international trade, often through tariffs and quotas.