Economics (7th Edition) (What's New in Economics)
Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 7, Problem 7.3.11PA
To determine

Principal-agent problem in the U.S.

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Apply the concept of equilibrium in the health market or medicine practice
Answer the following questions: a. Some health analysts believe that physicians try to increase their income by inducing demand for their services. For example, physicians may order unnecessary tests and treatments. Why would patients willingly accept these additional tests and treatments? b. How does the Internet, which makes freely available all sorts of information about diseases and their treatments, affect the physician–patient relationship?
Briefly discuss the demand and supply factors that contribute to rising health costs. Specify how (a ) asymmetric information, ( b) fee-for-service payments, ( c) defensive medicine, and ( d) medical ethics might cause health care costs to rise.
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