Question

question 26 (0.5 points)
when a patient makes the same decision as
the physician if the patient is fully informed,
the physician is a perfect agent.
true
false
question 27 (0.5 points)
if one insurer reduces prices paid for services
and the physician then begins to treat fewer
patients from that insurer and increases
services for another insurer, this is an
example of the substitution effect.
true
false

Explanation:

Question 26

A perfect agent (physician) acts in the patient's best interest such that if the patient were fully informed, they would make the same decision as the physician. This aligns with the definition of a perfect agent in healthcare agency theory.

The substitution effect occurs when a change in relative prices leads to a shift in consumption (or in this case, physician's service provision) from one option to another. Here, the insurer's price reduction changes the relative "cost" (in terms of revenue per patient) for the physician, leading to treating fewer patients from that insurer and more from another—this fits the substitution effect.

Answer:

True

Question 27