The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month mental health care programs. Applying the concept of diminishing marginal utility, the budget cuts should be made for spending on:

Question

Quizplus · Accepted Answer

Diminishing marginal utility suggests that the first units of a good or service consumed provide more utility than later units. Elective surgeries, being non-essential, likely offer lower marginal utility compared to essential mental health services, which can have significant, ongoing benefits. Therefore, cutting the budget for elective surgeries would align with the principle of diminishing marginal utility, as it would likely result in a smaller reduction in overall utility.

The Government Wants to Make Medicare Benefits Available to More