Answer to Question 1
D
During the Depression, doctors and hospitals saw their revenue decline because people were not able to pay for health care. The American Hospital Association created Blue Cross of California in 1939 with the intent of securing income.
Employer-sponsored health insurance came into existence during the Great Depression.
The federal government did not create employer-sponsored insurance plans.
Employer-sponsored insurance was not created as a temporary solution.
Answer to Question 2
A
The economics of health care are unlike any other business sector. Demand for health care is not directly related to the quality and availability of services. Incomplete information by consumers and uncertainty related to the need for future health care result in a situation in which society cannot agree on an acceptable level of output. This is known as market failure.
It can be argued that health care today is not meeting demands, but this is unrelated to the concept of market failure.
It may be true that more health care practices are failing economically in this market, but it is not related to the concept of market failure.
Investment in the stock market is not related to market failure.
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