micro chpt 4

Reference: Ref 4-3 (Exhibit: The Market for Health Care) Based on the exhibit and assuming that there are no third-party payers, the:

equilibrium price for health-care services is P 1

A market price support policy attempts to assist the farm industry by:

establishing price floors in farm output markets.

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

floors above

An area of concern in the provision of health care in the United States is that:

health-care costs and spending are too high.

Reference: Ref 4-4 (Exhibit: Third-Party Payers) When the price of $20 per visit becomes available to the consumer because of insurance:

health-care costs become $180 million, of which $60 million is paid by consumers and $120 million is paid by insurance.

In the stock market:

the demand for stocks in recent years can be affected by demographic and income changes.

A persistent shortage may occur if:

the government imposes a price ceiling.

Reference: Ref 4-3 (Exhibit: The Market for Health Care) When the price of P 2 becomes available to the consumer because of insurance:

the new quantity of health care is Q 2.

Reference: Ref 4-4 (Exhibit: Third-Party Payers) Three million physician office visits per week are available at a price of __________ per visit:

$60

Reference: Ref 4-1 (Exhibit: Supply and Demand in Agriculture) If the government set an effective price floor at one of the prices shown on the vertical axis:

Q 3 bushels of wheat would be supplied.

Reference: Ref 4-2 (Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _______ or _______ .

Rent 0; Rent 1

Which of the following statements concerning insurance for health-care services is true?

Subscribers to insurance plans may pay a small percentage of the cost of the health care they consume.

If the government sets out to help low-income people by establishing a maximum amount for rent:

a price ceiling has been set and a shortage of rental units may occur.

Reference: Ref 4-1 (Exhibit: Supply and Demand in Agriculture) To help farmers:

a price floor would be set at P 4, causing a surplus of Q 3 - Q 0.

Economists in general agree that rent controls are

an inefficient and ineffective way to help low-income families

Those things held unchanged when an equilibrium price is established:

are called demand and supply shifters if a change in one (or more) of them would change demand or supply

The bulk of the nation's output is produced by

corporations.

Farm products are normal goods, which means that as:

incomes go up, the demand curve shifts to the right.

Third-party payer systems are most likely to ________ the quantity of health care ________.

increase; demanded

Reference: Ref 4-4 (Exhibit: Third-party payers) At a price of $60 with a third party payer, the total cost of health-care services compared to the price that would prevail if there were no third-party payers has:

increased from $80 million to $180 million.

A market price floor for wheat:

increases the price paid by consumers.

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

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. Correct

A price ceiling will have no effect if

it is set above the equilibrium price.

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

it is the only price where the quantity demanded and the quantity supplied are equal.

A ceiling price set in the policy of rent controls:

may result in some people who rent out units to leave the business because they cannot cover costs.

A maximum price set below the equilibrium price is a:

price ceiling.

A minimum price set above the equilibrium price is a:

price floor

In markets with third-party payers,

prices consumers pay directly for the goods and services they consume decrease. b. prices suppliers receive for the goods and services they provide increase . c. total spending increases. d. All of the above. Correct

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

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

One source of high health care costs is the:

relatively large fraction of health care expenditures paid by third-party payers

One source of high health care costs is the:

relatively large fraction of health care expenditures paid by third-party payers.

A firm owned by one individual is called a:

sole proprietorship

Most firms in the United States today are:

sole proprietorships and partnerships.

Reference: Ref 4-2 (Exhibit: Rent Controls) If rent controls are set at Rent 0:

some renters would be willing to pay a price as high as Rent 4 for Q 0 units.

Reference: Ref 4-3 (Exhibit: The Market for Health Care) Based on the exhibit and assuming that there are no third-party payers:

the total amount spent on health services is OP 1AQ 1 at price P 1.

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.

third-party