Indicate two reasons why health care might be viewed as a public good:

1.Private medical care is subject to the free-rider problem.

2.It's difficult, and usually illegal, for hospitals to turn down patients who use emergency rooms, creating a free-rider problem.

3.Funding medical research into rare diseases is not practical for private firms.

4.Medical services are rival and excludable.

The expansion of health care coverage to include more uninsured persons creates both external costs and external benefits.

a.Indicate whether each of the following is a potential external benefit or a potential external cost by placing each item in the appropriate bin:

Healthier population Increased investment in medical research Increased wait times for doctor services Reduction in spending on other programs Lower costs of health care