Question 1

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.E) A) and C)
F) None of the above

Question 2

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)  deficiency in the availability of hospital beds.
D)  deficiency in the availability of diagnostic tests.E) A) and B)
F) B) and D)

Question 3

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 4

Use the following to answer questions 
Exhibit: Rent Controls 
-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.E) A) and D)
F) C) and D)

Question 5

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

Accepted Answer

A)  almost always help low-income families find low-cost housing.
B)  often help high-income families.
C)  cause the quantity supplied to exceed the quantity demanded.
D)  result in all of the above.E) B) and C)
F) A) and B)

Question 6

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.E) C) and D)
F) B) and D)

Question 7

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

Accepted Answer

A)  doctors.
B)  patients.
C)  hospitals.
D)  government.E) None of the above
F) A) and B)

Question 8

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.E) A) and D)
F) C) and D)

Question 9

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.E) A) and D)
F) None of the above

Question 10

Use the following to answer questions 
Exhibit: Rent Controls 0: 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." class="answers-bank-image d-inline" rel="preload" >
-(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.E) B) and C)
F) C) and D)

Question 11

A cost that farm subsidies and price floors imposes on the rest of the economy is:

Accepted Answer

A)  excessively mobile farm resources.
B)  higher consumer commodity prices.
C)  less government-funded agricultural research.
D)  efficient farmers that leave the farming industry.E) All of the above
F) B) and C)

Question 12

Most firms in the United States today are:

Accepted Answer

A)  sole proprietorships and partnerships.
B)  owned by government.
C)  corporations.
D)  owned by shareholders.E) None of the above
F) C) and D)

Question 13

During the 1930s, the role of the federal government in the U.S.agricultural industry:

Accepted Answer

A)  remained unchanged from the earlier decades.
B)  decreased substantially.
C)  decreased marginally.
D)  increased substantially.E) A) and B)
F) A) and C)

Question 14

A price that the government guarantees farmers will receive for a particular crop is a(n) 
:

Accepted Answer

A)  price ceiling.
B)  price support.
C)  deficiency price.
D)  export price.E) A) and B)
F) A) and C)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  the equilibrium quantity is 3 million physician office visits per week.
B)  the equilibrium quantity is 2 million physician office visits per week.
C)  the total amount spent on physician office visits at the equilibrium price is $180 million.
D)  the equilibrium quantity is 1 million physician office visits per week.E) B) and D)
F) A) and D)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

All health insurance plans charge the same and require subscribers to pay the same percentage of the costs of health care they consume.

Accepted Answer

A) True 
 B)False

Question 19

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.E) B) and C)
F) All of the above

Question 20

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 can be affected by demographic and income changes.
D)  all of the above are true.E) All of the above
F) B) and C)

Exam 4: Applications of Supply and Demand

A price that the government guarantees farmers will receive for a particular crop is a(n) :

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Most firms in the United States today are:

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

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

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In the stock market:

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

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A cost that farm subsidies and price floors imposes on the rest of the economy is:

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Use the following to answer questions Exhibit: Rent Controls -(Exhibit: Rent Controls) If rent controls are set at Rent0:

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

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Use the following to answer questions Exhibit: Rent Controls -Which of the following statements are true about price controls used by some local governments?

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All health insurance plans charge the same and require subscribers to pay the same percentage of the costs of health care they consume.

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

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

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The demand curve for stocks shows that:

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

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One source of high health care costs is the:

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During the 1930s, the role of the federal government in the U.S.agricultural industry:

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One source of high health-care costs is the:

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

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

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Use the following to answer questions Exhibit: Rent Controls -(Exhibit: Rent Controls) If rent controls are set at Rent₀:

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