D 15. The perceived central economic problem associated with the U.S. health care system is too many frivolous malpractice lawsuits. an overabundance of scanning machines. an overallocation of resources to the system. that workers lose their insurance when they lose their jobs.

D 16. Most economists who have studied the health care industry have concluded that there is an underallocation of resources for health care in the United States. an overallocation of resources for health care in the United States. insufficient technological progress in the medical industry. a need for government price controls for physicians’ fees.

D 17. Employer-provided private health insurance is unique to the United States and not typically found in other countries. is the most common form of health care provision in industrialized countries. substantially reduces the cost of health care provision relative to national health insurance schemes. provides a small percentage of health care spending in the United States.

D 18. A positive externality or spillover benefit occurs when product differentiation increases the variety of products available to consumers. the benefits associated with a product exceed those accruing to people who consume it. a firm does not bear all of the costs of producing a good or service. firms earn positive economic profits.

D 19. Economists consider governments to be “wasteful” whenever they over- or underallocate resources to a project. only when they overallocate resources to a project. only when they underallocate resources to a project. whenever they attempt to correct a market failure.

D 20. Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to the seller, Tony, was $140. Amanda experiences a consumer surplus of $10, and Tony experiences a producer surplus of $190. a producer surplus of $200, and Tony experiences a consumer surplus of $10. a consumer surplus of $670, and Tony experiences a producer surplus of $200. a producer surplus of $10, and Tony experiences a consumer surplus of $190.