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The Table Gives Supply and Demand Data for a Certain

Question 221

Multiple Choice

  The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays one-third of the equilibrium price, there would be a resulting allocative A) efficiency because, at 7,000 units, the marginal cost to society of $3,000 equals the marginal benefit of $3,000. B) efficiency because, at 12,000 units, the marginal cost to society is $4,000 and the marginal benefit is $1,000. C) inefficiency because, at 12,000 units, the marginal cost to society is $5,000 and the marginal benefit is $2,000. D) inefficiency because, at 12,000 units, the marginal cost to society is $2,000 and the marginal benefit is $5,000. The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays one-third of the equilibrium price, there would be a resulting allocative


A) efficiency because, at 7,000 units, the marginal cost to society of $3,000 equals the marginal benefit of $3,000.
B) efficiency because, at 12,000 units, the marginal cost to society is $4,000 and the marginal benefit is $1,000.
C) inefficiency because, at 12,000 units, the marginal cost to society is $5,000 and the marginal benefit is $2,000.
D) inefficiency because, at 12,000 units, the marginal cost to society is $2,000 and the marginal benefit is $5,000.

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