ECON2301 Chapter 4

In 2015, the percentage of total output the United States devoted to health care was about ________ percent. A) 2 B) 6 C) 10 D) 18

18

In 1960, the percentage of total output the United States devoted to health care was about ________ percent. A) 2 B) 5 C) 10 D) 13

5

In the market for health care: A) there has been no effect of the presence of third-party payers. B) the effect of third-party payers decreases the price that consumers pay. C) providers are encouraged to supply a greater quantity than they would without third-party payers. D) B and C are true.

B and C are true.

In the 1960s the dominant maker of mainframe computers was: A) IBM. B) Apple Computer. C) Compaq. D) GM.

IBM.

(Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _______ or _______. A) Rent0; Rent1 B) Rent1; Rent3 C) Rent3; Rent4 D) All of the above are equally likely rent control levels.

Rent0; Rent1

(Exhibit: Rent Controls) Without rent controls, the equilibrium rent is _______ and the equilibrium quantity is _______. A) Rent2; Q1 B) Rent1; Q1 C) Rent2; Q2 D) Rent3; Q3

Rent2; Q2

Which of the following would lead to an increase in the demand for health care? A) Physicians' productivity increases. B) Medicare subsidies are lowered. C) The average population age increases. D) Subsidies for Medicare are reduced.

The average population age increases.

During the Great Depression: A) agriculture was hit particularly hard. B) prices received by farmers rose by nearly 2/3 between 1930 and 1933. C) farm legislation in the 1930s sought to reduce the number of farms and farm income. D) all of the above are true.

agriculture was hit particularly hard.

The bulk of the nation's output is produced by: A) partnerships. B) proprietorship. C) corporations. D) none of the above.

corporations.

Between 1930 and 1933, the prices received by farmers tended to: A) fluctuate up and down about equally. B) decrease. C) remain constant. D) increase.

decrease.

Health care is a(n): A) abnormal good. B) superior good. C) normal good. D) good where higher incomes lead to less spending.

normal good.

A maximum price set below the equilibrium price is a: A) demand price. B) supply price. C) price floor. D) price ceiling.

price ceiling.

A minimum price set above the equilibrium price is a: A) demand price. B) supply price. C) price floor. D) price ceiling.

price floor.

A price that the government guarantees farmers will receive for a particular crop is a(n): A) price ceiling. B) price support. C) deficiency price. D) export price.

price support.

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

primarily due to technological change and an increase in the number of sellers.

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

rising spending for health care.

Most firms in the United States today are: A) sole proprietorship's and partnerships. B) owned by government. C) corporations. D) owned by shareholders.

sole proprietorship's and partnerships.

A firm owned by one individual is called a: A) corporation. B) partnership. C) sole proprietorship. D) none of the above.

sole proprietorship.

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

some renters would be willing to pay a price as high as Rent4 for Q0 units.

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

third-party