Economics Chapter 5 & 7
Under autarky, the equilibrium price is
$30
In 2015, the average height of adult males in the United States was
5' 9.5"
Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of
Asymmetric Information
The largest government-run health care system in the world, with 1.7 million employees, is the National Health Service (NHS) in the United Kingdom. The NHS recieves its funding primarily from
Income taxes
Which of the following is an example of a trade restriction?
Japan places a tax on Korean automobiles.
Under autarky, the producer surplus is area
S + V
Which of the following statements about the importance of trade to the U.S. economy is false?
The U.S. economy is highly dependent on international trade for growth in its gross domestic product
Which of the following did not contributed to the overall decline in death rates in the United States since 1981?
The decline in the population
Which of the following is the best example of a tariff?
a $150 fee imposed on all imported residential air conditioners
When Tesla, a U.S. company, purchases Italian-made Pirelli for its automobiles, the purchase is
a U.S. import and an Italian export
A quota is
a limit placed not the quantity of goods that can be imported into a country
All of the following are sources of comparative advantage except...
a strong foreign currency exchange rate
A tax imposed by a government on imports of a good into a country is called
a tariff
On average, people in low-income countries _____ than people in high-income countries.
are shorter
Federal and state governments in the United States pay for _____ of health care spending
just over half
Growth in labor productivity in the economy as a whole has been ______ labor productivity in health care.
more than twice as fast as
The congressional budget office estimates that _______ of the increase
most
The tariff revenue collected by the government equals
$15 million
In the United States in 2014, the percentage of people with some form of health insurance was about
90%
Under autarky, the consumer surplus is area
R
In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. All of the following are reasons for this exceot
Some countries have more resources than other countries
Autarky is a situation in which a county
does not trade with other countries
The individual mandate provision of the ACA requires
every U.S. resident to have health insurance.
Domestically produced goods and services sold to other countries are referred to as
exports
Between 1981 and 2013, deaths from kidney disease increased largely due to the effects of
increasing obesity
Federal and state governments in the United States pay for _______ of health care spending
just over half
Trade restrictions tend to preserve _______ in the protected industries and lead to ______ in other industries.
relatively few jobs; job losses
Imports are goods and services bought domestically
but produced in other countries
In the market for insurance,
buyers often have more information than sellers.
In the United States, health care spending on people
over age 65; aged 18 to 24
In 2014, ______ of the uninsured were younger than age 35.
over half
In the United States, out-of-pocket spending on health care per person
has been falling since 1965.
International trade
helps consumers but hurts firms that are less efficient than their foreign competitors.
A tariff
makes domestic producers better off
The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S. citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan
reduces, but does not eliminate, asymmetric information for both the insurer and the insured.
Of the following, the most rapid rise in health care costs in the United States can be attributed to
slow growth in labor productivity in health care
Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country
total consumption of goods is greater
In the United States in 2014, the percentage of firms that employed more than 200 workers and did not offer health insurance as a fringe benefit to the workers was about
2%
Use the table above to select the statement that accurately interprets the data in the table.
Bill has an absolute advantage in picking berries and Rob has an absolute advantage in catching fish.
Which country has an absolute advantage in producing belts?
Morocco
Which of the following is the best example of a quota?
a limit on the quantity of residential air conditioners that can be imported from a foreign country
because consumers who have insurance provided by their employers usually only pay a deductible
demand a larger quantity
The Trans-Pacific Partnership (TFF) is an agreement between the United States and ______ that was mean to reduce trade barriers.
eleven other countries
The study of the problems due to asymmetric information was begun when economists analyzed which type of market?
the market for automobiles
If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
the opportunity cost of production for sugar cane is lower in Brazil than in Cuba
In the United States in 2014, the percentage of people who recieved health insurance through their employer was about
55%
Select the statement that accurately interprets the data in the table.
Celeste has an absolute advantage in making saddles
Health insurance plans which typically reimburse doctors and hospitals with payment for each service they provide are known as
fee-for-service plans.
Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
some individuals in both countries may be made worse off because of trade
A tax imposed by a government on imports of a good into a country is called a
tariff
The United States has developed a comparative advantage in digital computers, airlines, and many prescription drugs. The source of its comparative advantage in these products is
technology
Which of the following is not part of the "taxes" provision of the Patient Protection and Affordable Care (ACA)?
Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated
In the United States in 2014, a majority of people received health care through
Their employers
The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S. -made goods, effectively acting as a quota of zero imports when stimulus money was being spent. The "Buy American" provision would ____ consumer surplus and ____ producer surplus for industries that produced protected products in the United States.
decrease; increase
In 2015, infant mortality in the United States was _____ per 1,000 live births.
6.2
The number of people receiving Medicare is expected to grow to 74 milion by the year
2025
In 1960, out-of-pocket spending on health care in the United States was
48 percent
In the United States in 2014, about _______ of uninsured people live in families in which at least one member has a job.
70%
In 2015, the average life expectancy at birth in the United Kingdom and other high-income countries was around __ years.
80
Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems
Shift a country's production possibilities frontier inward.
In the 1930s the United States charged an average tariff rate
that exceeded 50 percent
Over the past several decades there has been rapid growth in international trade. This growth has been due to all but one of the following factors. Which factor has not contributed to the growth of international trade?
A change in the tariffs charged on many goods
Health insurance plans which typically reimburse doctors mainly by paying ________ are known as health maintence organizations.
A flat fee per patient
Consumers usually pay less than the total cost of medical treatment because
A third party, usually an employer, often pays most of the bill.
Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil. We can conclude that
Honduras has a lower opportunity cost of producing bananas relative to Brazil
Automobiles and many other products are differentiated. As a result,
different countries may each have a comparative advantage in producing different types of automobiles
The Patient Protection and Affordable Care Act (ACA) is scheduled ______, at which point more than 30 million additional individuals are expected to have health care coverage.
to be fully implemented by 2019
Free trade refers to trade between countries
that is without restrictions
Despite the Obama administration's support of the Trans-Pacific Partnership (TPP), the AFL-CIO labor union has argued that the TPP will not
(create jobs, protect the environment, ensure safe, all of the above)
In 2015, health care's share of gross domestic product in the United States was about
18 percent
Without the tarriff place, the United States consumes
45 million pounds of coffee
In the United States in 2014, the percentage of firms that employed between 3 and 199 workers and did not offer health insurance as a fringe benefit to the workers was about
46%
By the year 2015, health care spending on Medicare, Medicaid, and other U.S. government programs as a percentage of GDP had reached a level of
6 percent
________ is the ability to produce more of a good or service than competitors when using the same amount of resources.
Absolute Advantage
Trade that is within a country to between countries is based on the principle of
Comparative advantage
What is the term that describes a situation in which one party to an economic transaction has less information than the other party?
Asymmetric Information
In the United States from 1981 to 2013, deaths from _____ increased largely due to the effects of increasing obesity.
Diabeties
The health care system in ____ is referred to as a single-payer health care system, and is a system in which the government provides national health insurance to all residents.
Canada
An economic principle that explains why people pursue different occupations is
Comparative advantage
The first discussion of comparative advantage appears in a book written by
David Ricardo
The provision of the Patient Protection and Affordable Care Act (ACA) which states that every firm with more than 200 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan is the ______ provision.
Employer Mandate
Which country has absolute advantage in producing swords?
Estonia
In the past two decades the United States lost its comparative advantage in automobiles to Japan. What factor was most responsible for the development of Japan's comparative advantage in automobiles?
Japanese firms excelled in process technology
In the United States from 1981 to 2013, deaths from which of the following increased?
Kidney Disease
Which of the following is not part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (ACA)?
Limits on the size of deductibles and on waiting periods before coverage takes effect have been eliminated
The 1994 agreement that eliminated most tariffs among the United States, Canada, and Mexico is known as
NAFTA
If the ______ cost of production for two goods is different between two countries then mutually beneficial trade is possible.
Opportunity
The provision of the Patient Protection and Affordable Care Act (ACA) which states that insurance companies are required to participate in a high-risk pool that will insure individuals with pre-existing medical conditions who have been unable to buy health insurance for at least six months is the ________ provision.
Regulation of health insurance
Which of the following is not part of the "state health insurance marketplaces" provision of the Patient Protection and Affordable Care Act (ACA)?
Small businesses with fewer than 50 employees are exempt from being required to participate in the program.
_______ tended to increase spending on health care in the United States.
The aging of the U.S. population, as well as advances in medical technology, have
If a hospital knows that an insurance company will pay for most of a patient's bill, the hospital has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of
The principle agent problem
If a hospital knows that an insurance company will pay for most of a patient's bill, the hospital has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of
The principle-agent problem
In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a ______ where consumers of health care pay a nominal fee and the rest is paid by the health insurance provider.
Third-party payer system
_____ account(s) for between 1 and 4 percent of health care costs in the United States.
Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices
When Sophie, a French citizen, purchases a Dell computer in Paris that was produced in Texas, the purchase is
a U.S. export and a French import
Countries gain from specializing in producing goods in which they have _______ and trading for goods in which other countries have _______.
a comparative advantage; a comparative advantage
Pakistan has developed a comparative advantage in the production of clothing. The source of its comparative advantage in this product is
a large supply of unskilled workers
China has developed a comparative advantage in the production of children's toys. The source of this comparative advantage is
a large supply of unskilled workers and relatively little capital.
The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA) will increase government spending
by about $2 trillion over 10 years
The principal-agent problem is a problem
caused by agents pursuing their own interests rather than the interests of the principals who hired them
Costa Rica is a leading exporter of bananas. What explains the comparative advantage of this country in banana production?
climate and soil conditions in Costa Rica which are well-suited banana production
Compared to the United States, health care spending per person in other high-income countries has been
growing at a slower rate
In the United States, out-of-pocket spending on health care per person
has been falling since 1965
In the United States since 1900, life expectancy at birth has ____ and the death rate has _____.
increased; decreased.
doctors have _____ incentive to control their costs when consumers ______ for a visit to the doctor's office
less; only a deductible
A consequence of increasing marginal costs of producing laptop computers in the United States is
the United States will stop short of complete specialization in the production of laptop computers
The Congressional Budget Office estimates that _____ account(s) for less than 1 percent of health care costs in the United States.
the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance
In the principal-agent relationship, the principal is
the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf
The terms of trade refers to
the ratio at which a country can trade its exports for imports from other countries
About ______ of pharmaceutical patents are issued to U.S. firms
two-thirds
About ______ of research on new medicines is carried out in the United States.
two-thirds
