Economics Chapter 5 & 7

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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


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