Economics (McConnell), 18th Edition

Chapter 21: Health Care

Key Questions

1. What are the "twin problems" of the health care industry as viewed by society? How are they related?

2. What are the estimated income and price elasticities of demand for health care? How does each relate to rising health care costs?

3. Using the concepts in Chapter 7's discussion of consumer behavior, explain how health care insurance results in an overallocation of resources to the health care industry. Use a demand and supply diagram to specify the resulting efficiency loss.

Chapter 21 Key Question Solutions (27.0K)