Question 1

According to the Case in Point on corn, which of the following is a criticism that has been raised of government spending in support of corn-based ethanol?

Accepted Answer

A) limited reduction in dependence on foreign oil. 
B) detrimental effects on the environment. 
C) increased food prices and an increase in world hunger. 
D) All of the above. 
A) limited reduction in dependence on foreign oil. 
B) detrimental effects on the environment. 
C) increased food prices and an increase in world hunger. 
D) All of the above.

Question 2

Use the following to answer questions 
Exhibit: Rent Controls  
-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.

Question 3

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 4

A market price support policy for crops 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 5

Economists classify health care as:

Accepted Answer

A) an inferior good. 
B) a normal good. 
C) a good with many close substitutes. 
D) a good whose quantity changes considerably with a change in price. 
A) an inferior good. 
B) a normal good. 
C) a good with many close substitutes. 
D) a good whose quantity changes considerably with a change in price.

Question 6

Use the following to answer questions 
Exhibit: Third-Party Payers  
-(Exhibit: Third-Party Payers)
When the price of $20 per visit becomes available to the consumer because of insurance:

Accepted Answer

A) health-care costs become $180 million, of which $60 million is paid by consumers and $120 million is paid by insurance. 
B) health-care costs become $180 million, of which $120 million is paid by consumers and $60 million is paid by insurance. 
C) the new quantity of physician office visits is 1 million visits per week. 
D) both A and C are true. 
A) health-care costs become $180 million, of which $60 million is paid by consumers and $120 million is paid by insurance. 
B) health-care costs become $180 million, of which $120 million is paid by consumers and $60 million is paid by insurance. 
C) the new quantity of physician office visits is 1 million visits per week. 
D) both A and C are true.

Question 7

Use the following to answer questions 
Exhibit: Rent Controls  
-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 8

The relationship between the value and price of a stock suggests that:

Accepted Answer

A) the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price. 
B) it is the market's best guess regarding the expected value of the company's future profits. 
C) stocks are overvalued. 
D) both A and B are true. 
A) the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price. 
B) it is the market's best guess regarding the expected value of the company's future profits. 
C) stocks are overvalued. 
D) both A and B are true.

Question 9

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 10

Use the following to answer questions 
Exhibit: The Market for Health Care  
-(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 11

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 demand and supply, 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 demand and supply, equilibrium is restored quickly. 
D) all of the above are true.

Question 12

Those things held unchanged when an equilibrium price is established:

Accepted Answer

A) are called demand and supply shifters if a change in one (or more)of them would change demand or supply. 
B) include only supply shifters. 
C) seldom change, and therefore prices and quantity in most markets are remarkably stable. 
D) never change, by definition. 
A) are called demand and supply shifters if a change in one (or more)of them would change demand or supply. 
B) include only supply shifters. 
C) seldom change, and therefore prices and quantity in most markets are remarkably stable. 
D) never change, by definition.

Question 13

Use the following to answer questions 
Exhibit: Rent Controls  
-(Exhibit: Rent Controls)
If rent controls are imposed, they will most likely be set at either _______ or _______ .

Accepted Answer

A) Rent0; Rent1  
B) Rent1; Rent3  
C) Rent3; Rent4  
D) All of the above are equally likely rent control levels. 
A) Rent0; Rent1  
B) Rent1; Rent3  
C) Rent3; Rent4  
D) All of the above are equally likely rent control levels.

Question 14

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 15

In terms of equity, existing farm policies tend to help:

Accepted Answer

A) all farmers equally. 
B) none of the farmers. 
C) poor farmers more than wealthy farmers. 
D) wealthy farmers more than poor farmers. 
A) all farmers equally. 
B) none of the farmers. 
C) poor farmers more than wealthy farmers. 
D) wealthy farmers more than poor farmers.

Question 16

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 17

The individual mandate provision of the Affordable Care Act of 2010 requires:

Accepted Answer

A) nurses to provide medical services for individuals with pre-existing conditions. 
B) doctors to provide medical services for individuals with pre-existing conditions. 
C) hospitals to provide medical care to individuals who are not covered under group insurance plans from their employers. 
D) individuals to purchase health insurance. 
A) nurses to provide medical services for individuals with pre-existing conditions. 
B) doctors to provide medical services for individuals with pre-existing conditions. 
C) hospitals to provide medical care to individuals who are not covered under group insurance plans from their employers. 
D) individuals to purchase health insurance.

Question 18

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 19

The Oregon Plan in the 1990s for the provision of health care to people living below the poverty line generally increased the number and type of procedures for which they were eligible.

Accepted Answer

A) True 
 B)False

Question 20

Price controls:

Accepted Answer

A) always increase economic efficiency. 
B) always lead to more equitable results. 
C) can result in inequitable outcomes. 
D) all of the above statements are true. 
A) always increase economic efficiency. 
B) always lead to more equitable results. 
C) can result in inequitable outcomes. 
D) all of the above statements are true.

According to the Case in Point on corn, which of the following is a criticism that has been raised of government spending in support of corn-based ethanol?

Use the following to answer questions Exhibit: Rent Controls -A ceiling price set in the policy of rent controls:

Health care is a(n) :

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

Economists classify health care as:

Use the following to answer questions Exhibit: Third-Party Payers -(Exhibit: Third-Party Payers) When the price of $20 per visit becomes available to the consumer because of insurance:

Use the following to answer questions Exhibit: Rent Controls -A maximum legal price is called:

The relationship between the value and price of a stock suggests that:

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

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

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

Those things held unchanged when an equilibrium price is established:

Use the following to answer questions Exhibit: Rent Controls -(Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _ or _ .

A feature of the health-care market is:

In terms of equity, existing farm policies tend to help:

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

The individual mandate provision of the Affordable Care Act of 2010 requires:

Which of the following statements is (are) True?

The Oregon Plan in the 1990s for the provision of health care to people living below the poverty line generally increased the number and type of procedures for which they were eligible.

Price controls:

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

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

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Exam 4: Applications of Supply and Demand

According to the Case in Point on corn, which of the following is a criticism that has been raised of government spending in support of corn-based ethanol?

Use the following to answer questions Exhibit: Rent Controls -A ceiling price set in the policy of rent controls:

Health care is a(n) :

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

Economists classify health care as:

Use the following to answer questions Exhibit: Third-Party Payers -(Exhibit: Third-Party Payers) When the price of $20 per visit becomes available to the consumer because of insurance:

Use the following to answer questions Exhibit: Rent Controls -A maximum legal price is called:

The relationship between the value and price of a stock suggests that:

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

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

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

Those things held unchanged when an equilibrium price is established:

Use the following to answer questions Exhibit: Rent Controls -(Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _______ or _______ .

A feature of the health-care market is:

In terms of equity, existing farm policies tend to help:

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

The individual mandate provision of the Affordable Care Act of 2010 requires:

Which of the following statements is (are) True?

The Oregon Plan in the 1990s for the provision of health care to people living below the poverty line generally increased the number and type of procedures for which they were eligible.

Price controls:

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

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

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

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

Use the following to answer questions Exhibit: Rent Controls -(Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _ or _ .