Question

The marginal impact of overall medical spending on health status is ________in the United States. The marginal impact of preventative care spending on health is likely ________ than for overall medical spending.A. small; smaller
B. small; larger
C. large; smaller
D. large; larger

Answer 1

Answer:

D. large; Larger

Explanation:

Note that, the United States is a leading consumer and producer in the health industry. Therefore, it is logical to conclude based on available facts data that the United States marginal impact of overall medical spending on health status is large and the marginal impact of preventative care spending on health is likely larger than other countries.

Answer 2

Answer:

C - larger; smaller

Explanation:

Marginal effects usually determine the change in a dependent variable (overall medical spending) based on a change in another variable that affects the dependent one (Spending on preventative care), all things remaining the same. If spending on preventative care is high, the overall medical bill should be low, assuming treatment costs, labor costs of health workers and all other factors are constant. If preventative care spending is low, the overall medical spending will be high.

The marginal effects of overall medical spending on health status is larger in the US. The marginal effects of preventative care spending on health is likely smaller than for overall spending.