Question 1

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

Accepted Answer

A) equilibrium price for physician office visits is $80. 
B) equilibrium quantity is 3 million physician office visits per week. 
C) total amount spent on physician office visits per week at the equilibrium price is $40 million. 
D) equilibrium price for physician office visits is $40. 
A) equilibrium price for physician office visits is $80. 
B) equilibrium quantity is 3 million physician office visits per week. 
C) total amount spent on physician office visits per week at the equilibrium price is $40 million. 
D) equilibrium price for physician office visits is $40.

Question 2

Which of the following would lead to an increase in the supply of health care?

Accepted Answer

A) An increase in the number of people insured. 
B) Increased tax subsidies for health care. 
C) An increase in the productivity of doctors. 
D) All of the above would increase the supply of health care. 
A) An increase in the number of people insured. 
B) Increased tax subsidies for health care. 
C) An increase in the productivity of doctors. 
D) All of the above would increase the supply of health care.

Question 3

A market price support policy establishes a price floor, which:

Accepted Answer

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

Question 4

Although health-care costs have increased recently in absolute terms, they have fallen as a percentage of total output.

Accepted Answer

A) True 
 B)False

Question 5

Third-party payer systems for health-care services include payments made by:

Accepted Answer

A) doctors. 
B) patients. 
C) hospitals. 
D) insurance companies. 
A) doctors. 
B) patients. 
C) hospitals. 
D) insurance companies.

Question 6

Which of the following statements is (are)true?

Accepted Answer

A) In the last few decades health-care spending has grown dramatically. 
B) Health-care costs have grown relative to an increasing total output. 
C) Health-care costs account for more than two and a half times the share of total output that they did in 1960. 
D) All of the above are true. 
A) In the last few decades health-care spending has grown dramatically. 
B) Health-care costs have grown relative to an increasing total output. 
C) Health-care costs account for more than two and a half times the share of total output that they did in 1960. 
D) All of the above are true.

Question 7

The United States is confronted with two significant problems in health care.They are:

Accepted Answer

A) health-care cost and how to limit spending on health care. 
B) increasing the demand for health care and decreasing the supply of health care. 
C) the need to build more hospitals and the slow rate of technological change in health care. 
D) all of the above. 
A) health-care cost and how to limit spending on health care. 
B) increasing the demand for health care and decreasing the supply of health care. 
C) the need to build more hospitals and the slow rate of technological change in health care. 
D) all of the above.

Question 8

Health care is an inferior good.

Accepted Answer

A) True 
 B)False

Question 9

What percentage of total health-care spending is paid by private and government insurance?

Accepted Answer

A) 10 
B) 20 
C) 50 
D) 80 
A) 10 
B) 20 
C) 50 
D) 80

Question 10

The textbook suggests that:

Accepted Answer

A) technology has greatly increased health-care costs. 
B) technology has decreased health-care costs. 
C) technology has had little effect on health-care costs. 
D) at first technology increased costs but later it reduced them. 
A) technology has greatly increased health-care costs. 
B) technology has decreased health-care costs. 
C) technology has had little effect on health-care costs. 
D) at first technology increased costs but later it reduced them.

Question 11

Economists in general agree that rent controls are:

Accepted Answer

A) an efficient and equitable way to help low-income families. 
B) an inefficient and ineffective way to help low-income families. 
C) an efficient method of dealing with the supply of rental units but don't provide relief for low-income families. 
D) not very efficient but still a good way to solve the problem of low income. 
A) an efficient and equitable way to help low-income families. 
B) an inefficient and ineffective way to help low-income families. 
C) an efficient method of dealing with the supply of rental units but don't provide relief for low-income families. 
D) not very efficient but still a good way to solve the problem of low income.

Question 12

An arrangement in which consumers choose their health-care services while other institutions pay a share of the cost of those services is called a(n)________ payer system.

Accepted Answer

A) provider fees 
B) insurance premiums 
C) third-party 
D) catastrophic insurance 
A) provider fees 
B) insurance premiums 
C) third-party 
D) catastrophic insurance

Question 13

-(Exhibit: The Market for Health Care)The quantity Q2 is available at price:

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) none of the above are correct. 
A) P1. 
B) P2. 
C) P3. 
D) none of the above are correct.

Question 14

A minimum price set above the equilibrium price is a:

Accepted Answer

A) demand price. 
B) supply price. 
C) price floor. 
D) price ceiling. 
A) demand price. 
B) supply price. 
C) price floor. 
D) price ceiling.

Question 15

-(Exhibit: Third-Party Payers)Three million physician office visits per week are available at a price of __________ per visit:

Accepted Answer

A) $60 
B) $40 
C) $20 
D) none of the above prices are correct. 
A) $60 
B) $40 
C) $20 
D) none of the above prices are correct.

Question 16

-(Exhibit: Supply and Demand in Agriculture)To help farmers:

Accepted Answer

A) a price floor would be set at P4, causing a surplus of Q3 - Q0. 
B) a price floor would be set at P2, causing a surplus of Q2 - Q0. 
C) a price ceiling would be set at P4, causing a surplus of Q2 - Q1. 
D) a price floor would be set at P1, causing a shortage of Q3 - Q0. 
A) a price floor would be set at P4, causing a surplus of Q3 - Q0. 
B) a price floor would be set at P2, causing a surplus of Q2 - Q0. 
C) a price ceiling would be set at P4, causing a surplus of Q2 - Q1. 
D) a price floor would be set at P1, causing a shortage of Q3 - Q0.

Question 17

Third-party payments have lead to an increase in the price and quantity of health care in the United States.

Accepted Answer

A) True 
 B)False

Question 18

-(Exhibit: Third-Party Payers)Suppose insurance lowers the price consumers pay to $20 per visit.Compared to the situation without insurance, this would:

Accepted Answer

A) reduce the equilibrium price to $20. 
B) reduce the quantity demanded to 2 million visits per week. 
C) increase the quantity demanded to 3 million visits per week. 
D) do none of the above. 
A) reduce the equilibrium price to $20. 
B) reduce the quantity demanded to 2 million visits per week. 
C) increase the quantity demanded to 3 million visits per week. 
D) do none of the above.

Question 19

A maximum legal price is called:

Accepted Answer

A) a price support. 
B) a price floor. 
C) a price ceiling. 
D) the parity price. 
A) a price support. 
B) a price floor. 
C) a price ceiling. 
D) the parity price.

Question 20

Which of the following statements are true about price controls used by some local governments?

Accepted Answer

A) Price controls are imposed to increase market efficiency. 
B) Price controls seem to be a very effective way to reduce inequities. 
C) Price controls are put into place when it is thought that the market price is in some way unfair or inequitable. 
D) All of the above statements are true. 
A) Price controls are imposed to increase market efficiency. 
B) Price controls seem to be a very effective way to reduce inequities. 
C) Price controls are put into place when it is thought that the market price is in some way unfair or inequitable. 
D) All of the above statements are true.

Exam 4: Applications of Demand and Supply

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

Which of the following would lead to an increase in the supply of health care?

A market price support policy establishes a price floor, which:

Although health-care costs have increased recently in absolute terms, they have fallen as a percentage of total output.

Third-party payer systems for health-care services include payments made by:

Which of the following statements is (are)true?

The United States is confronted with two significant problems in health care.They are:

Health care is an inferior good.

What percentage of total health-care spending is paid by private and government insurance?

The textbook suggests that:

Economists in general agree that rent controls are:

An arrangement in which consumers choose their health-care services while other institutions pay a share of the cost of those services is called a(n)________ payer system.

-(Exhibit: The Market for Health Care)The quantity Q2 is available at price:

A minimum price set above the equilibrium price is a:

-(Exhibit: Third-Party Payers)Three million physician office visits per week are available at a price of __________ per visit:

-(Exhibit: Supply and Demand in Agriculture)To help farmers:

Third-party payments have lead to an increase in the price and quantity of health care in the United States.

-(Exhibit: Third-Party Payers)Suppose insurance lowers the price consumers pay to $20 per visit.Compared to the situation without insurance, this would:

A maximum legal price is called:

Which of the following statements are true about price controls used by some local governments?

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)The quantity Q₂ is available at price: