Question 1

In the 1960s the dominant maker of mainframe computers was:

Accepted Answer

A) IBM. 
B) Apple Computer. 
C) Compaq. 
D) GM. 
A) IBM. 
B) Apple Computer. 
C) Compaq. 
D) GM.

Question 2

-(Exhibit: Third-Party Payers)Based on the exhibit, and assuming there are no third-party payers:

Accepted Answer

A) the total amount spent on health services is $80 million per week. 
B) the equilibrium price and quantity are $60 and 3 million per week, respectively. 
C) At a price of $20, there would be a surplus. 
D) At a price of $60, there would be a shortage. 
A) the total amount spent on health services is $80 million per week. 
B) the equilibrium price and quantity are $60 and 3 million per week, respectively. 
C) At a price of $20, there would be a surplus. 
D) At a price of $60, there would be a shortage.

Question 3

Rent controls set a price ceiling below the equilibrium price and therefore:

Accepted Answer

A) quantity supplied exceeds the quantity demanded. 
B) quantity demanded exceeds the quantity supplied. 
C) a surplus of rental units will result. 
D) poor people will obviously and clearly be helped. 
A) quantity supplied exceeds the quantity demanded. 
B) quantity demanded exceeds the quantity supplied. 
C) a surplus of rental units will result. 
D) poor people will obviously and clearly be helped.

Question 4

The equilibrium price is often considered to be "just right" because:

Accepted Answer

A) it equates the amount supplied with the amount demanded. 
B) it does not result in a shortage. 
C) it does not result in a surplus. 
D) of all of the above. 
A) it equates the amount supplied with the amount demanded. 
B) it does not result in a shortage. 
C) it does not result in a surplus. 
D) of all of the above.

Question 5

The demand curve for stocks shows that:

Accepted Answer

A) at lower prices, less stock will be purchased. 
B) at lower prices, more people calculate that the expected value of the firm's future earnings justify the stock's purchase. 
C) at lower prices, more stock will be offered on the market. 
D) A and B are true. 
A) at lower prices, less stock will be purchased. 
B) at lower prices, more people calculate that the expected value of the firm's future earnings justify the stock's purchase. 
C) at lower prices, more stock will be offered on the market. 
D) A and B are true.

Question 6

As the fraction of health-care costs paid by consumers falls, their quantity of health-care services consumed increases.

Accepted Answer

A) True 
 B)False

Question 7

Between 1930 and 1933, the prices received by farmers tended to:

Accepted Answer

A) fluctuate up and down about equally. 
B) decrease. 
C) remain constant. 
D) increase. 
A) fluctuate up and down about equally. 
B) decrease. 
C) remain constant. 
D) increase.

Question 8

In the stock market:

Accepted Answer

A) changes in expectations will affect suppliers but not demanders. 
B) expectations that cause the demand curve to shift in one direction are usually associated with a supply shift in the same direction. 
C) the demand for stocks in recent years has been greatly affected by demographic change and rising incomes. 
D) all of the above are true. 
A) changes in expectations will affect suppliers but not demanders. 
B) expectations that cause the demand curve to shift in one direction are usually associated with a supply shift in the same direction. 
C) the demand for stocks in recent years has been greatly affected by demographic change and rising incomes. 
D) all of the above are true.

Question 9

Health care is a(n):

Accepted Answer

A) abnormal good. 
B) superior good. 
C) normal good. 
D) good where higher incomes lead to less spending. 
A) abnormal good. 
B) superior good. 
C) normal good. 
D) good where higher incomes lead to less spending.

Question 10

-(Exhibit: Rent Controls)If rent controls are set at Rent0:

Accepted Answer

A) the shortage of rental units is Q2 to Q0. 
B) some renters would be willing to pay a price as high as Rent4 for Q0 units. 
C) no one would have to pay a higher actual price than Rent0 nor would anyone be willing to do so. 
D) there would be a shortage of rental units, but it is impossible to tell how large the shortage is based on the information provided. 
A) the shortage of rental units is Q2 to Q0. 
B) some renters would be willing to pay a price as high as Rent4 for Q0 units. 
C) no one would have to pay a higher actual price than Rent0 nor would anyone be willing to do so. 
D) there would be a shortage of rental units, but it is impossible to tell how large the shortage is based on the information provided.

Question 11

Of the following, which would result in increasing demand in the health-care industry?

Accepted Answer

A) an increase in the spread of contagious diseases 
B) an older population 
C) increasing incomes 
D) All of the above are demand factors that would result in higher demand. 
A) an increase in the spread of contagious diseases 
B) an older population 
C) increasing incomes 
D) All of the above are demand factors that would result in higher demand.

Question 12

-(Exhibit: The Market for Health Care)When the price of P2 becomes available to the consumer because of insurance:

Accepted Answer

A) health-care costs are now OP3BQ2, of which OP3CQ2 is paid by consumers and P2P3BQ2 is paid by insurance. 
B) health-care costs are now OP3BQ2, of which P2P3BQ2 is paid by consumers and OP2CQ2 is paid by insurance. 
C) the new quantity of health care is Q2. 
D) the new quantity of health care is Q1. 
A) health-care costs are now OP3BQ2, of which OP3CQ2 is paid by consumers and P2P3BQ2 is paid by insurance. 
B) health-care costs are now OP3BQ2, of which P2P3BQ2 is paid by consumers and OP2CQ2 is paid by insurance. 
C) the new quantity of health care is Q2. 
D) the new quantity of health care is Q1.

Question 13

-(Exhibit: The Market for Health Care)At price P3 the total cost of health-care services compared to price P1 has increased from:

Accepted Answer

A) OP3BQ2 to OP1AQ2. 
B) OP1AQ1 to OP3BQ2. 
C) OP3BQ2 to OP1AQ1, and consumers pay OP1AQ12. 
D) OP1AQ1 to OP3BQ2, and insurance pays OP2CQ2. 
A) OP3BQ2 to OP1AQ2. 
B) OP1AQ1 to OP3BQ2. 
C) OP3BQ2 to OP1AQ1, and consumers pay OP1AQ12. 
D) OP1AQ1 to OP3BQ2, and insurance pays OP2CQ2.

Question 14

In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was:

Accepted Answer

A) mainly a function of resource prices. 
B) primarily due to technological change and an increase in the number of sellers. 
C) a result of a dramatic decrease in U.S.wages. 
D) a result of a dramatic decrease in foreign wages. 
A) mainly a function of resource prices. 
B) primarily due to technological change and an increase in the number of sellers. 
C) a result of a dramatic decrease in U.S.wages. 
D) a result of a dramatic decrease in foreign wages.

Question 15

The equilibrium price established by supply and demand could be called a "just right" price because:

Accepted Answer

A) any price above it would be "too high" and cause a shortage. 
B) any price below it would be "too low" and cause a surplus. 
C) it is the only price where the quantity demanded and the quantity supplied are equal. 
D) of all of the above. 
A) any price above it would be "too high" and cause a shortage. 
B) any price below it would be "too low" and cause a surplus. 
C) it is the only price where the quantity demanded and the quantity supplied are equal. 
D) of all of the above.

Question 16

Price ceilings which lead to shortages will impose costs on society because they:

Accepted Answer

A) will lead to long waiting lines. 
B) may result in black market prices, which are higher than the market-determined price would be. 
C) lead to a smaller quantity offered on the market. 
D) do all of the above. 
A) will lead to long waiting lines. 
B) may result in black market prices, which are higher than the market-determined price would be. 
C) lead to a smaller quantity offered on the market. 
D) do all of the above.

Question 17

A market price support policy establishes price ________ the market equilibrium.

Accepted Answer

A) floors below 
B) floors above 
C) ceilings below 
D) ceilings above 
A) floors below 
B) floors above 
C) ceilings below 
D) ceilings above

Question 18

By limiting the number and type of procedures it would cover, the Oregon Plan for health-care insurance for the poor was able to increase the number of people included in its coverage.

Accepted Answer

A) True 
 B)False

Question 19

According to the textbook, which of the following are suggestions to limit health-care spending?

Accepted Answer

A) requiring patients to pay a larger share 
B) government regulation 
C) the use of insurance companies that limit spending 
D) all of the above 
A) requiring patients to pay a larger share 
B) government regulation 
C) the use of insurance companies that limit spending 
D) all of the above

Question 20

A market price floor for wheat:

Accepted Answer

A) increases the price paid by consumers. 
B) decreases the price paid by consumers. 
C) decreases the price received by farmers. 
D) does not change the price received by farmers. 
A) increases the price paid by consumers. 
B) decreases the price paid by consumers. 
C) decreases the price received by farmers. 
D) does not change the price received by farmers.

Exam 4: Applications of Demand and Supply

In the 1960s the dominant maker of mainframe computers was:

-(Exhibit: Third-Party Payers)Based on the exhibit, and assuming there are no third-party payers:

Rent controls set a price ceiling below the equilibrium price and therefore:

The equilibrium price is often considered to be "just right" because:

The demand curve for stocks shows that:

As the fraction of health-care costs paid by consumers falls, their quantity of health-care services consumed increases.

Between 1930 and 1933, the prices received by farmers tended to:

In the stock market:

Health care is a(n):

-(Exhibit: Rent Controls)If rent controls are set at Rent0:

Of the following, which would result in increasing demand in the health-care industry?

-(Exhibit: The Market for Health Care)When the price of P2 becomes available to the consumer because of insurance:

-(Exhibit: The Market for Health Care)At price P3 the total cost of health-care services compared to price P1 has increased from:

In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was:

The equilibrium price established by supply and demand could be called a "just right" price because:

Price ceilings which lead to shortages will impose costs on society because they:

A market price support policy establishes price ________ the market equilibrium.

By limiting the number and type of procedures it would cover, the Oregon Plan for health-care insurance for the poor was able to increase the number of people included in its coverage.

According to the textbook, which of the following are suggestions to limit health-care spending?

A market price floor for wheat:

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: Rent Controls)If rent controls are set at Rent₀:

-(Exhibit: The Market for Health Care)When the price of P₂ becomes available to the consumer because of insurance:

-(Exhibit: The Market for Health Care)At price P₃ the total cost of health-care services compared to price P₁ has increased from: