Test 3 Economics

Which of the following cause an increased demand for healthcare?

Cost shifting

Compared with 1960, national health expenditures as a share of GDP in the United States have:

Increased greatly

The most common explanation for Social Security payments accounting for a larger share of federal government expenditures is

Increases in life expectancy

The most common explanation for Social Security payments accounting for a larger share of federal government expenditure is

Increases in life expectancy.

Which of the following is not an aspect of the Affordable Care Act?

Jail time for people who refuse to participate

Under rent control, tenants can expect

Lower rent and lower quality housing.

The federal health care spending program that specifically targets the poor is called

Medicaid

The federal healthcare spending program that specifically targets the poor is called

Medicaid

Many health economists believe that it will be very difficult to stem the rise in health care costs because

Medical advances are providing betters ways to extend and improve human lives but at high costs.

The government's health plan for the elderly is called

Medicare

People over 65 years old now consume

Over one-third of the federal governments budget.

Which type of of tax is used to finance Social Security program in the United States?

Payroll Tax

Both social security and medicare are financed or paid for by

Payroll taxes

The long run effects of rent controls are a good illustration of the principle that

People respond to incentives

Most analysts expect the largest federal spending category to continue to grow in importance for many years

Social Security

Most analysts expect the largest federal spending category to continue to grow in importance for many years into the future. What category of spending is this?

Social Security

Out largest social insurance program in the U.S. is

Social Security

The payroll tax differs from the individual income tax is earmarked to pay for

Social Security and Medicare

The revenue that the federal government collects from payroll taxes is earmarked to pay for

Social Security and Medicare

The argument that social security decreases savings because it decreases the need to saved privately for retirement is the:

Social Security wealth effect.

A major difference between social insurance and public assistance programs is that:

Social insurance covers the entire eligible population, but public assistance covers only the needy.

Like spending on Social Security, the share of federal government spending on Medicare has risen

The elderly population growing more rapidly than the overall population

Which of the following represents a transfer payment?

The government sends your grandfather his social security check

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

With shortages and waiting lists, they have no incentive to maintain and improve their property.

A transfer payment is

a form of government spending that is not made in exchange for a currently produced good or service.

Economists generally believe that rent control is

a highly inefficient way to help the poor raise their standard of living.

When we say that Social Security benefits are progressive, we mean that:

low-income workers have a higher replacement rate than higher income workers.

Most health care economists believe that it will be very difficult to stem the rise of health care costs because

medical advances are providing better ways to extend and improve human lives but at very expensive costs.

When Social Security is described as a pay-as-you-go system, it means Social Secuity

pays benefits our of the current taxes collected from people who are working.

The presence of a price control in a market for a good or service usually is an indication that

policy makers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers and sellers.

In a free, competitive market, what is the rationing mechanism?

price

Which of the following is not a rationing mechanism used by landlords to cities with rent control?

price

Rent control policies tend to cause

relatively smaller shortages in the short run than in the long run because supply and demand tend to be more inelastic in the short run than the long run.

Plans to partially privatize Social Security would reduce the Social Security tax and:

require all workers establish investment accounts with the taxes saved.

Rent Control

- is an example of price ceiling -leads to a larger shortage of apartments in the long run than in the short run -leads to lower rents and, in the long run, to lower-quality housing

In 1950, the burden of one social security recipient was shared by

16 workers

By 2030 the burden of one social security recipient will be shared by

2 workers

In 20 years the percent of all Americans that will be 65 and older will be

20%

Jane retires. The last year she worked, she earned $40,000. Her social security payments the first year total $20,000. Her replacement rate is

50%

The principal mandates of the Affordable Care Act include:

All people are required to have health insurance coverage or pay a fine.

Which of the following is not one of the reasons why America is getting older

Americans are working longer

When we say that the Social Security tax is a matching tax, we mean that

Both workers and their employers pay the Social Security tax based on the workers' earnings.

The argument that Social Security increases savings by encouraging early retirement is the:

Early Retirement effect

One economist has argued that rent control is "the best way to destroy a city, other than bombing." Why would an economist say this?

He fears that rent control will eliminate the incentive to maintain buildings leading to a deterioration of the city.

Which of the following is not a result of rent control?

Higher quality housing

Suppose the equilibrium price of a physical examination by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Quantity demanded for physicals increases, the quantity for physicals decreases

A tax takes $2,500 from Joe whose income is $25,000. The tax takes $5,000 from James whose income is $100,000. The tax is:

Regressive

The workers retirement benefits as a percentage of his/her final working years's earnings is the:

Replacement rate

Rent Control

Serves as an example of a price ceiling

Many health economists believe that President Obama's 2010 health care reform bill and other measures proposed by lawmakers to reduce the growths of health care costs will have only a limited impact because

The main source of higher costs is medical advances which extend and improve lives.

The long-run problem of Social Security is that:

The ratio of workers to recipients is declining.

Which of the following statements about the effects of rent control is correct?

The short-run effect of rent control is a relatively small shortage of apartments, and the long run effect of rent control is a larger shortage of apartments.

What do physicians' sovereignty and third-party payment have in common?

They both increase the demand for healthcare.

Long lines

are an inefficient rationing mechanism because they waste buyers' time, and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly.

As rationing mechanisms, prices

are efficient, but long lines are inefficient.

Under rent control, bribery is a mechanism to

bring the total price of an apartment (including the bribe) closer to the equilibrium price.

Medicare has been the focus of many proposed reforms over the last several years because

health care costs have risen more rapidly than the cost of other goods and services.

Medicare has been the focus of many proposed reforms over the last several years because

health care costs have risen more rapidly than the cost of other goods in the economy.

The goal of rent control is to

help the poor by making housing more affordable

Which of the following would be supported by those on the economic right?

increased competition on the supply side of health care, medical savings account, and increased competition on the demand side of health care.

Defensive medicine:

increases the demand for health care

As a rationing mechanism, discrimination according to seller bias is

inneficient and potentially unfair

The median age in the U.S. is the age

that divides the older half of the population into the younger half.

When we say that the Social Security tax is matching tax, we mean that:

the benefits are proportional to the taxes they paid in.

Like spending on Social Security, the share of federal government spending on Medicare has risen substantially over time. This is most likely a result of

the elderly population growing more rapidly than the overall population.

Which of the following is an important reason for the projected increase in government spending as a percentage of GDP over the next several decades?

the increase in life expectancy resulting from advances in healthcare.

An alternative to rent control laws that would not reduce the quantity of housing supplied is

the payment by government of a fraction of a poor family's rent.

When we say that the Social Security Tax is regressive, we mean that

the tax takes a larger percent of income from low-income than high income workers

Medicaid and Medicare differ in that:

to be eligible for Medicaid, families have to have low income, but there is no means test for Medicare.

Economists believe that privatized hospitals would:

would increase efficiency