Question 1

A ceiling price set in the policy of rent controls:

Accepted Answer

A) will be set at a price above the equilibrium price. 
B) may result in some people who rent out units to leave the business because they cannot cover costs. 
C) will lead to rental units being higher in quality because landlords are guaranteed a high price. 
D) will create a surplus of housing. 
A) will be set at a price above the equilibrium price. 
B) may result in some people who rent out units to leave the business because they cannot cover costs. 
C) will lead to rental units being higher in quality because landlords are guaranteed a high price. 
D) will create a surplus of housing. B

Question 2

In the mid 1960s, the percentage of total output the United States devoted to health care was about ________ percent.

Accepted Answer

A) 2 
B) 6 
C) 10 
D) 13 
A) 2 
B) 6 
C) 10 
D) 13 B

Question 3

In the market for personal computers and in the stock market:

Accepted Answer

A) supply and demand shifts change prices and quantities. 
B) persistent shortages and surpluses rarely exist. 
C) in response to shifts in supply and demand, equilibrium is restored quickly. 
D) all of the above are true. 
A) supply and demand shifts change prices and quantities. 
B) persistent shortages and surpluses rarely exist. 
C) in response to shifts in supply and demand, equilibrium is restored quickly. 
D) all of the above are true. D

Question 4

Farm products are normal goods, which means that as:

Accepted Answer

A) incomes go up, the demand curve shifts to the right. 
B) incomes go up, the supply curve shifts to the right. 
C) price falls, the quantity demanded decreases. 
D) as incomes increase, people buy less. 
A) incomes go up, the demand curve shifts to the right. 
B) incomes go up, the supply curve shifts to the right. 
C) price falls, the quantity demanded decreases. 
D) as incomes increase, people buy less.

Question 5

-(Exhibit: The Market for Health Care)Suppose insurance lowers the price consumers pay to P2.Compared to the situation without insurance, this would:

Accepted Answer

A) reduce the equilibrium price to P2. 
B) reduce the quantity demanded to Q1. 
C) increase the quantity demanded to Q2. 
D) have no effect on quantity demanded. 
A) reduce the equilibrium price to P2. 
B) reduce the quantity demanded to Q1. 
C) increase the quantity demanded to Q2. 
D) have no effect on quantity demanded.

Question 6

One source of high health-care costs is the:

Accepted Answer

A) relatively small fraction of health-care expenditures paid directly by patients. 
B) relatively small fraction of health-care expenditures paid by third-party payers. 
C) deficiency in the availability of diagnostic tests. 
D) excessive competition in the market for health care. 
A) relatively small fraction of health-care expenditures paid directly by patients. 
B) relatively small fraction of health-care expenditures paid by third-party payers. 
C) deficiency in the availability of diagnostic tests. 
D) excessive competition in the market for health care.

Question 7

An important reason for the rapid increase in output in the computer industry after 1980 was:

Accepted Answer

A) the invention of the microchip. 
B) a reduction in the size and cost of computers. 
C) a great increase in the number of computer producers. 
D) all of the above. 
A) the invention of the microchip. 
B) a reduction in the size and cost of computers. 
C) a great increase in the number of computer producers. 
D) all of the above.

Question 8

-(Exhibit: Supply and Demand in Agriculture)If the government set an effective price floor at one of the prices shown on the vertical axis:

Accepted Answer

A) Q3 bushels of wheat would be supplied. 
B) with this much wheat on the market, the price would fall to P1. 
C) the resulting shortage would be made up by the government out of its accumulated stocks. 
D) all of the above would be true. 
A) Q3 bushels of wheat would be supplied. 
B) with this much wheat on the market, the price would fall to P1. 
C) the resulting shortage would be made up by the government out of its accumulated stocks. 
D) all of the above would be true.

Question 9

According to the textbook, much of the discussion about the health-care "problem" in the United States has focused on:

Accepted Answer

A) the inability of doctors to provide adequate health-care services. 
B) rising spending for health care. 
C) the shortage of adequate space in hospitals. 
D) the surplus of nurses. 
A) the inability of doctors to provide adequate health-care services. 
B) rising spending for health care. 
C) the shortage of adequate space in hospitals. 
D) the surplus of nurses.

Question 10

The increase in the cost of health care was caused in part:

Accepted Answer

A) by technology, which has created new and costly treatments. 
B) by doctors' receiving incomes above the market level. 
C) by the government's fixing prices in health care. 
D) because insurance companies have been left out of health care. 
A) by technology, which has created new and costly treatments. 
B) by doctors' receiving incomes above the market level. 
C) by the government's fixing prices in health care. 
D) because insurance companies have been left out of health care.

Question 11

The Case in Point on the Oregon Plan makes it clear that:

Accepted Answer

A) the state has an insurance plan that covers all citizens of Oregon 
B) the state's insurance plan applied primarily to those whose incomes were lower than the poverty line 
C) the state sets a limit on how much it will spend but not on what procedures it will cover 
D) the state limits the procedures it will cover, but does not set a maximum budget for state-supported health-care coverage 
A) the state has an insurance plan that covers all citizens of Oregon 
B) the state's insurance plan applied primarily to those whose incomes were lower than the poverty line 
C) the state sets a limit on how much it will spend but not on what procedures it will cover 
D) the state limits the procedures it will cover, but does not set a maximum budget for state-supported health-care coverage

Question 12

-(Exhibit: Supply and Demand in Agriculture)If a price floor at P4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

Accepted Answer

A) Q3 - Q0. 
B) Q3 - Q1. 
C) Q2 - Q1. 
D) none of the above are correct. 
A) Q3 - Q0. 
B) Q3 - Q1. 
C) Q2 - Q1. 
D) none of the above are correct.

Question 13

-(Exhibit: The Market for Health Care)Based on the exhibit and assuming that there are no third-party payers:

Accepted Answer

A) the equilibrium quantity is Q2. 
B) the equilibrium quantity is Q1. 
C) the total amount spent on health-care services at the equilibrium price is given by the area OP3BQ2. 
D) none of the above are true. 
A) the equilibrium quantity is Q2. 
B) the equilibrium quantity is Q1. 
C) the total amount spent on health-care services at the equilibrium price is given by the area OP3BQ2. 
D) none of the above are true.

Question 14

Third-party payer systems are most likely to ________ the quantity of health care ________.

Accepted Answer

A) increase; demanded 
B) decrease; demanded 
C) not change; supplied 
D) decrease; supplied 
A) increase; demanded 
B) decrease; demanded 
C) not change; supplied 
D) decrease; supplied

Question 15

In the last 30 years, the costs of health care have _______ as a percentage of U.S.output.

Accepted Answer

A) gone up in absolute terms, but decreased 
B) gone down absolutely, but increased 
C) gone down absolutely and 
D) increased absolutely and 
A) gone up in absolute terms, but decreased 
B) gone down absolutely, but increased 
C) gone down absolutely and 
D) increased absolutely and

Question 16

Health care is a normal good.

Accepted Answer

A) True 
 B)False

Question 17

Over the last few decades government has decreased its participation in health care.

Accepted Answer

A) True 
 B)False

Question 18

A feature of the health-care market is:

Accepted Answer

A) that demand has fallen relative to supply. 
B) that supply has increased relative to demand. 
C) that demand has increased relative to supply. 
D) all of the above. 
A) that demand has fallen relative to supply. 
B) that supply has increased relative to demand. 
C) that demand has increased relative to supply. 
D) all of the above.

Question 19

One source of high health care costs is the:

Accepted Answer

A) relatively large fraction of health care expenditures paid directly by patients. 
B) relatively large fraction of health care expenditures paid by third-party payers. 
C) system of prospective reimbursement payments. 
D) deficiency in the availability of diagnostic tests. 
A) relatively large fraction of health care expenditures paid directly by patients. 
B) relatively large fraction of health care expenditures paid by third-party payers. 
C) system of prospective reimbursement payments. 
D) deficiency in the availability of diagnostic tests.

Question 20

In the 1990s, the percentage of total output the United States devoted to health care was about ________ percent.

Accepted Answer

A) 2 
B) 6 
C) 10 
D) 13 
A) 2 
B) 6 
C) 10 
D) 13

Exam 4: Applications of Demand and Supply

A ceiling price set in the policy of rent controls:

In the mid 1960s, the percentage of total output the United States devoted to health care was about ________ percent.

In the market for personal computers and in the stock market:

Farm products are normal goods, which means that as:

-(Exhibit: The Market for Health Care)Suppose insurance lowers the price consumers pay to P2.Compared to the situation without insurance, this would:

One source of high health-care costs is the:

An important reason for the rapid increase in output in the computer industry after 1980 was:

-(Exhibit: Supply and Demand in Agriculture)If the government set an effective price floor at one of the prices shown on the vertical axis:

According to the textbook, much of the discussion about the health-care "problem" in the United States has focused on:

The increase in the cost of health care was caused in part:

The Case in Point on the Oregon Plan makes it clear that:

-(Exhibit: Supply and Demand in Agriculture)If a price floor at P4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

-(Exhibit: The Market for Health Care)Based on the exhibit and assuming that there are no third-party payers:

Third-party payer systems are most likely to ________ the quantity of health care ________.

In the last 30 years, the costs of health care have _______ as a percentage of U.S.output.

Health care is a normal good.

Over the last few decades government has decreased its participation in health care.

A feature of the health-care market is:

One source of high health care costs is the:

In the 1990s, the percentage of total output the United States devoted to health care was about ________ percent.

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Inflation and Unemployment

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

Filters

-(Exhibit: The Market for Health Care)Suppose insurance lowers the price consumers pay to P₂.Compared to the situation without insurance, this would:

-(Exhibit: Supply and Demand in Agriculture)If a price floor at P₄ is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

Third-party payer systems are most likely to the quantity of health care .