Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program? Introduction: Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

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Answer 1

Question

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

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Answer 2

Question

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

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Answer 3

Question

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

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Answer 4

Question

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

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Answer 5

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

Answer 6

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

Answer 7

Chapter 5, Problem 1FCT

To determine

Why is it unrealistic for government projections to assume that the quantity of heath care services demanded will not increase when Medicare subsidies push down the out-of-pocket prices of people eligible for the program?

Introduction:

Externality in an economy arises when the action of one party imposes a cost or benefit on the other party who did not choose to incur that cost or benefit. Economists often urge governments to adopt policies that "internalize" an externality, so that costs and benefits will affect mainly parties who choose to incur them.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 5 - Prob. 5.1LO Ch. 5 - Prob. 5.2LO Ch. 5 - Prob. 5.3LO Ch. 5 - Prob. 5.4LO Ch. 5 - Prob. 5.5LO Ch. 5 - Prob. 5.1SC Ch. 5 - Prob. 5.2SC Ch. 5 - Prob. 5.3SC Ch. 5 - Prob. 5.4SC Ch. 5 - Prob. 5.5SC

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