Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 22 - Health Care - Review Questions: 5

Answer

a. A deadweight loss related to overconsumption.

Work Step by Step

When people are covered under health insurance, people tend to be more negligent about their safety and also tend to overuse the healthcare services as the service is available to them at minimal cost because the healthcare expenditure is borne by insurance companies. This creates a problem of overconsumption and thus creates a deadweight loss.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.