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:

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Education's Benefit

Refers to the positive impacts of education on an individual's abilities, earning potential, and societal contributions.

Externality

A cost or benefit arising from an economic activity that affects third parties who did not choose to incur that cost or benefit.

National Defense

The government activities, plans, and policies aimed at protecting a country's territory and citizens from external threats and maintaining overall security.