PPD 170 - Quiz #1 Answers

PPD 170 - Quiz #1 Answers - PP&D170 / PPH122 Spring...

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Spring 2008 Quiz 1 Name______________________ 1) a) Explain what is an externality? An externality is an action such that either the costs or the benefits do not accrue to the person or organization making the decision on whether to undertake the action or the degree of the action to undertake. b) Give an example of an externality and explain if and why it is positive or negative. A positive externality is when the benefits accrues to the external party – e.g. immunizations, where individuals other that the person being immunized have a lower probability of contracting the disease because of the immunization. A negative externality is when the costs accrue to the external party – e.g. a drunk driver who causes an accident and kills other people, or a plant that creates air or water pollution 2) a) The uncertainty in the onset of disease (check all that apply) leads to demand for health insurance leads to demand for medical care influences planning for medical resources capacity
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This note was uploaded on 06/02/2008 for the course POLICY, PL 170/122 taught by Professor Mukamel during the Spring '08 term at UC Irvine.

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PPD 170 - Quiz #1 Answers - PP&D170 / PPH122 Spring...

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