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6 February, 07:05

The availability of health insurance tends to

a. decrease the quantity of health care demanded and cause an underallocation of resources to the health care industry.

b. increase the quantity of health care demanded and cause an underallocation of resources to the health care industry.

c. increase the quantity of health care demanded and cause an overallocation of resources to the health care industry.

d. decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry.

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Answers (2)
  1. 6 February, 07:56
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    Answer: C
  2. 6 February, 08:52
    0
    c. increase the quantity of health care demanded and cause an overallocation of resources to the health care industry.

    Explanation:

    Since health insurance includes provided health care, insurance companies and programs demand more health care in order to complete their insurance programs. Since more health care is demanded, financial resources naturally go to health care, as it is a lucrative business, like most things in demand.
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