|
|
QUESTION 6.
“Developing new antibiotics is expensive. It is also known that the more frequently bacteria are exposed to antibiotics, the more quickly the bacteria will develop resistance to the antibiotics. Yet, usually, each parent will press a doctor for an antibiotic if there is any chance it will heal a child quicker than that without drugs.”
The above statement can be best understood as a problem of
(a) Public good: Bacteria are public bad
(b) Adverse selection: Doctors have information that is not available to parents
(c) Risk aversion: Parents are risk averse
(d) Short-run utility maximization: Most parents are myopic; they fail to see the long run effect
The correct ans is (a), which is fine. But why is option (d) incorrect?
|
Locked
