Provide three rationales for government involvement in health ...

[CBme]

Provide three rationales for government involvement in health care markets. Which is the most recent?
 
  What will be an ideal response?

Question 2

For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
 
  A) prices will adjust until the consumers choose bundles that are on the contract curve.
  B) the indifference curves will shift back to the contract curve.
  C) the contract curve will shift to connect these bundles.
  D) no adjustments need to be made.

[sarah_brady415]

Answer to Question 1

One rationale for government intervention into health care markets is in the area of contagious diseases. Since contagious diseases are a type of externality because one person does not take into account that if they get it they can easily spread it to others, it provides a rationale for government helping to control and prevent the spread of disease. A second rationale for government intervention is in the dissemination of health care information. This rationale has resulted in the regulation of physicians and pharmaceuticals. A third rationale for government involvement is that many individuals cannot afford or obtain health insurance, a growing problem as health care costs have increased.

Answer to Question 2

A

[CBme]

TYSM

[patma1981]

Excellent