Question: 5. (2 pts) Encounters with physicians fall into the class of interactions known as principal-agent problems. In the case of encounters with physicians, the

5. (2 pts) Encounters with physicians fall into the class of interactions

5. (2 pts) Encounters with physicians fall into the class of interactions known as "principal-agent" problems. In the case of encounters with physicians, the principal is (a) the patient or (b) the physician. 6. (2 pts) True/False Compared with doctors who are paid on a fee-for-service basis by health insurers, doctors who are salaried have incentives to provide less care. 7. (9 pts) In the scenario you will illustrate below, show an outcome such that physician induced demand leads to an increase in quantity but no increase in price (beyond the initial market equilibrium price)

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