What Do Prices “Know” That You Don’t?

There are 2 discussion questions. Write a 250 word response for each one. Must include biblical integration.

Discussion 1:)

Most systems of medical insurance substantially lower the out-of-pocket costs consumers have to pay for additional units of physician services and hospitalization. Some reduce these costs to zero. How does this method of payment affect the consumption levels of medical services? Might this method of organization result in “too much” consumption of medical services? Discuss.
Discussion 2:)Watch: What Do Prices Know That You Don’t? (Michael Munger) [4:34 minutes]
After watching the above video, discuss why price can be a good rationing device in the market economy and what are the advantages and disadvantages of the price system. Which farmer, do you think, did the right thing and the better thing for the society? Justify your analysis.

 

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