Economics

Suppose there is a new program for government health care coverage. Which of the following are true? 1. The demand for health care services will become more elastic. 2. The quantity of health care services demanded should rise. 3. The demand for health care services will become less elastic. 4. The price for health care services to consumers should rise. 5. The price for health care services to consumers should fall. 6. The quantity of health care services demanded should fall.

2. The quantity of health care services demanded should rise. 3. The demand for health care services will become less elastic. 5. The price for health care services to consumers should fall.

Hospitals get better control of costs. 1. This is a cost of paying hospitals using prospective payments. 2. This is a benefit of paying hospitals using prospective payments. 3. This is a benefit of paying hospitals on what services they perform. 4. This is a cost of paying hospitals on what services they perform.

2. This is a benefit of paying hospitals using prospective payments.

Under Medicare, Part A hospitals are paid 1. a fixed amount per patient they see in a year. 2. based on the Diagnosis Related Group each patient falls into when they arrive. 3. their costs. 4. their costs plus 5% profit.

2. based on the Diagnosis Related Group each patient falls into when they arrive.

If a consumer can be easily prevented from consuming a good or service by a producer, then the good exhibits 1. rivalry. 2. exclusivity. 3. an externality. 4. a moral loss.

2. exclusivity.

The opportunity cost for you to attend college might best be described as 1. the value to you of not working. 2. income you could have earned at a full-time job. 3. the cost of books. 4. the cost of tuition.

2. income you could have earned at a full-time job.

A single payer system in the United States would 1. decrease availability of health care services to those who are currently uninsured. 2. necessitate a tax increase. 3. likely decrease the waiting time for certain procedures. 4. likely fail because no other nations have tried it.

2. necessitate a tax increase

Publicly provided health insurance for the poor will 1. lower the price of health care to the non-poor. 2. raise the level of health care consumed by the poor. 3. decrease the total amount of health care consumed. 4. lower the price of health care to the non-poor and decrease the total amount of health care consumed.

2. raise the level of health care consumed by the poor.

If a person has a deductible of $300 and must pay $500 out of a $1,300 health-care expense in a year, then their co-payment rate is 1. 5%. 2. 10%. 3. 20%. 4. 50%.

3. 20%.

Hospitals are motivated to overtreat patients, thereby running up the costs to increase reimbursement and profits. 1. This is a cost of paying hospitals using prospective payments. 2. This is a benefit of paying hospitals using prospective payments. 3. This is a cost of paying hospitals on what services they perform. 4. This is a benefit of paying hospitals on what services they perform

3. This is a cost of paying hospitals on what services they perform.

HMO insurance 1. is more expensive than fee-for-service insurance. 2. has fewer meddlesome bureaucrats than fee-for- service. 3. restricts doctor choice to primary care physicians. 4. requires all care be taken in hospitals.

3. restricts doctor choice to primary care physicians.

. The Children's Health Insurance Program was created in the 1. 1940's. 2. 1960's. 3. 1980's. 4. 1990's

4. 1990's

11. It is more likely that health expenses will rise faster in the United States than in Canada or the United Kingdom because 1. there are fewer individuals with chronic and expensive conditions in Canada and the United Kingdom. 2. doctors in Canada and the United Kingdom are educated abroad and have lower salaries. 3. inflation in Canada and the United Kingdom has been very low, but that is not the case in the United States. 4. Canada and the United Kingdom have a single-payer system financed by taxpayers, but the United States does not.

4. Canada and the United Kingdom have a single-payer system financed by taxpayers, but the United States does not.

Medicare began in 1. the 1920's. 2. the 1930's. 3. the 1950's. 4. the 1960's.

4. the 1960's.

Insurers need to be required to accept those with pre-existing medical conditions rather than making acceptance optional otherwise they would 1. not want to insure those with conditions that are expensive to treat. 2. only offer policies in states that did not have this provision. 3. only want to insure those with conditions that are expensive to treat. 4. not cover standard tests

1. not want to insure those with conditions that are expensive to treat.

A co-payment is the 1. percentage of a covered expense that an individual will have to pay (after the deductible is met). 2. percentage of a covered expense that an insurance company will have to pay (after the deductible is met). 3. amount of covered expense that an individual will have to pay before the insurance company pays anything. 4. amount of covered expense that an insurance company will have to pay before the individual pays

1. percentage of a covered expense that an individual will have to pay (after the deductible is met).

If a good is inferior and income decreases, then a) the demand curve will shift to the right. b) the demand curve will shift to the left. c) the supply curve will shift to the right. d) the supply curve will shift to the left.

a) the demand curve will shift to the right

The fact that the demand for eggs is inelastic should not surprise you because a) they are a very cheap food. b) the demand for nearly all food products are inelastic. c) the supply of eggs is inelastic. d) they are so expensive.

a) they are a very cheap food.

The elasticity of demand is related to the slope of the demand curve a) and only the slope of the demand curve. b) but also the (price, quantity) position on the demand curve. c) but also the slope of the supply curve. d) and whether the good is normal or inferior.

b) but also the (price, quantity) position on the demand curve.

When an economics student draws a supply and demand diagram to model an increase in the income, she is assuming this change happens a) semper fidelis. b) ceteris paribus. c) ipso facto. d) defacto.

b) ceteris paribus.

The evidence is that welfare reform in 1996 resulted in _____welfare rolls. a) a substantial increase in b) a slight increase in c) a substantial decrease in d) no impact on

c) a substantial decrease in

The optimization assumption suggests that people make a) irrational decisions. b) unpredictable decisions. c) decisions to make themselves as well off as possible. d) decisions without thinking very hard.

c) decisions to make themselves as well off as possible.

The risk-averse person will buy health insurance a) only if the expected health costs equal the insurance premium. b) only if the expected health costs are greater than the insurance premium. c) even if the expected health costs are less than the insurance premium. d) under no circumstances.

c) even if the expected health costs are less than the insurance premium.

Medicaid spending per recipient is a) twice that of the average citizen's use of health care. b) somewhat less than the average citizen's use of health care. c) somewhat greater than the average citizen's use of health care. d) half that of the average citizen's use of health care.

c) somewhat greater than the average citizen's use of health care.

A change in the price of eggs will impact a) the demand for eggs. b) the supply of eggs. c) the quantity demanded and the quantity supplied of eggs but neither demand nor supply. d) both the supply and demand for eggs.

c) the quantity demanded and the quantity supplied of eggs but neither demand nor supply.

1. Scarcity implies that the allocation scheme chosen by society can a) not make more of any one good. b) always make more of any good. c) typically make more of a good but at the expense of making less of another. d) always make more of all goods simultaneously.

c) typically make more of a good but at the expense of making less of another.

Answer the following questions about elasticity of demand. a. Which of the following would most likely have an elastic demand? 1. gasoline 2. cigarettes 3. peanuts 4. salt

peanuts

. If the deductible is $200 and the co-payment is 20%, on a covered expense of $1200 the individual will pay _____, and their insurance company will pay ______. 1. $400;$800 2. $200; $1000 3. $800; $400 4. $600; $600

1. $400;$800

Combined, in 2014, Medicare and Medicaid covered 1. 6 million people. 2. 25 million people. 3. 105 million people. 4. 143 million people.

1. 6 million people.

Incentives are provided for hospitals to discharge patients as soon as possible. 1. This is a benefit of paying hospitals using prospective payments. 2. This is a benefit of paying hospitals on what services they perform. 3. This is a cost of paying hospitals on what services they perform. 4. This is a cost of paying hospitals using prospective payments.

1. This is a benefit of paying hospitals using prospective payments.

When creating market demand curves for privately produced and privately consumed goods, we must 1. add the quantity demanded at each price. 2. add the price paid at each quantity. 3. take an average of the quantity demanded at each price. 4. take an average of the price paid at each quantity

1. add the quantity demanded at each price.

The demand curve for this good would be relatively 1. flat 2. steep

1. flat

Medicaid is the Federal Government program that provides health insurance to the 1. poor. 2. injured. 3. elderly. 4. handicapped.

1. poor.

Relative to the alternative, a mini-med health insurance policy would be a good policy for 1. older individuals with specific health care issues because these policies only cover certain conditions. 2. young, healthy individuals because the premiums are low; however, the maximum out-of-pocket is a percentage of income. 3. children because these policies are only for well care. 4. young, healthy individuals because the premiums are low; however, there is no maximum out-of-pocket amount.

4. young, healthy individuals because the premiums are low; however, there is no maximum out-of-pocket amount.

Poverty is a ________ concept in that a person with that income in the US may be considered in poverty, while a person with that same income in Somalia may be in the upper quarter of income earners a) relative b) absolute c) irrelevant d) fictitious

A. Relative

In a simple 300 million-person world of all four-person families, if the poverty line is $12,500 and half of the 10 million families (with 40 million poor people) earn $10,000 and the other half earn $7,500, then the poverty gap is a) $125 billion (=10 million x 12,500) b) $250 billion (=20 million x $12,500) c) $150 billion (=20 million x $2,500 + 20 million x 5,000) d) $37.5 billion (=5 million x $2,500 +5 million x 5,000)

D. $37.5 billion (=5 million x $2,500 +5 million x 5,000)

Medicaid is 1. a private health insurance program for government employees. 2. a private health insurance program for the poor. 3. a public health insurance program for the poor. 4. a public health insurance program for the elderly.

a private health insurance program for government employees.

19. As the baby boom generation (born between 1946 and 1964) ages, which of the following is a likely outcome? a) A movement to the right in the demand for nursing home beds b) A movement to the left in the supply for nursing home beds c) A movement to the right in the supply of nursing home beds d) A movement to the left in the demand of nursing home beds

a) A movement to the right in the demand for nursing home beds

When a 65-year-old goes to the hospital, the part of Medicare that pays for the hospital bill is a) Part A. b) Part B. c) Part C. d) Part D.

a) Part A.

Without an increase in price, an increase in demand will lead to a) a shortage. b) a surplus. c) socialism. d) equilibrium.

a) a shortage.

If the supply and demand curves cross at a quantity of 100, then the price necessary to get firms to sell more than that will have to be _______ equilibrium. a) above b) at c) below d) within 10 percent either way of

a) above

Medicare's prescription drug coverage will likely a) cost substantially more than it was estimated to cost in 2003. b) cost substantially less than it was estimated to cost in 2003. c) cost slightly less than it was estimated to cost in 2003. d) cost about what it was estimated to cost in 2003.

a) cost substantially more than it was estimated to cost in 2003.

1. The supply and demand model examines how prices and quantities are determined a) in markets. b) by governments. c) by churches. d) by monopolists.

a) in markets.

. In 2014, unless a state was willing to forgo all federal money for Medicaid, a member of a family earning less than 133 percent of the poverty line is a) ineligible for any health care assistance. b) eligible for Medicare's prescription drug plan only. c) eligible for all of Medicare. d) eligible for Medicaid.

a) ineligible for any health care assistance.

An increase in household income for a good that is considered normal would a) move its demand curve to the right. b) move its demand curve to the left. c) cause a movement along the demand curve to a (higher price, lower quantity) point. d) cause a movement along the demand curve to a (lower price, higher quantity) point.

a) move its demand curve to the right.

The increase in technology used to produce a good would a) move its supply curve to the right. b) move its supply curve to the left. c) cause a movement along the supply curve to a (higher price, higher quantity) point. d) cause a movement along the supply curve to a (lower price, lower quantity) point.

a) move its supply curve to the right.

2 The one word in the definition of economics that focuses on the fact that it is impossible to provide all of the goods and services that everyone wants is a)scarcity. b)resources. c)study. d)allocation.

a) scarcity

A production possibilities frontier is a simple model of a) scarcity and allocation. b) prices and output. c) production and costs. d) inputs and outputs.

a) scarcity and allocation.

The quintessential example of a normal good would be a) steak for someone who liked beef. b) the substitution of Granny Smith for Golden Delicious apples. c) Ramen Noodles for a poor college student. d) peanut butter and jelly for a young boy or girl.

a) steak for someone who liked beef.

In a simple 300 million-person world of all four-person families, if the poverty line is $12,500 and half of the 10 million families (with 40 million poor people) earn $10,000 and the other half earn $7,500, then the poverty rate is a) 3.33 % (10 million/300 million) b) 13.33 % (40 million/300 million) c) 16.66 % (50 million/300 million) d) 96.33% (300 million - 10 million/300 million)

b) 13.33 % (40 million/300 million)

Part of the Patient Protection and Affordable Care Act involved a tax on indoor tanning that tanning salons are required to collect from tanners and send to the federal government. Which of the following would be the predicted result? a) A movement to the right in the demand for tanning b) A movement to the left in the demand for tanning c) A movement to the right in the supply of tanning d) A movement to the left in the supply of tanning

b) A movement to the left in the demand for tanning

Which of the following forms of private insurance is likely to have the lowest premiums and least doctor choice flexibility? a) Medicare b) An HMO c) A PPO d) A fee-for-service plan

b) An HMO

If the supply and demand curves cross at a price of $2, at any price above that there will be a) an equilibrium. b) a surplus. c) a shortage. d) a crisis.

b) a surplus.

If the production possibilities frontier is not bowed out, but is a line, there is a) scaricity b) constant opportunity cost c) unemployment d) increasing opportunity cost

b) constant opportunity cost

Suppose a firm cannot figure out whether the demand for the good it sells is elastic or inelastic but discovers that every time it raises its price, its total revenue declines. Their a) demand is unit elastic. b) demand is elastic. c) demand is inelastic. d) demand is perfectly inelastic.

b) demand is elastic.

Suppose you observe that minor changes in supply seem to cause dramatic changes in price, you would conclude that a) demand is unit elastic. b) demand is elastic. c) demand is inelastic. d) demand is perfectly inelastic.

b) demand is elastic.

The problem of the "third-party payer" arises in health care in the form of a) doctors having to pay part of the own expenses. b) government and/or private insurance paying a significant part of the costs. c) patients having to have to pay a significant part of the costs. d) hospitals not being able to collect from many patients.

b) government and/or private insurance paying a significant part of the costs.

When a program like Medicaid is introduced, the market demand curve for health care will a) increase and flatten. b) increase and become more steep. c) decrease and flatten. d) decrease and become more steep.

b) increase and become more steep.

Imagine an economist ordering pizza by the slice. When deciding how many slices to order she would pick that number where the enjoyment of the _____ equals the enjoyment she could get from using the money on another good. a) first slice b) last slice c) average slice d) total number of slices

b) last slice

At the equilibrium price, a) quantity demanded exceeds quantity supplied. b) quantity demanded equals quantity supplied. c) quantity demanded is less than quantity supplied. d) quantity demanded is unrelated to quantity supplied.

b) quantity demanded equals quantity supplied.

The primary motivation for the purchase of any insurance lies in the fact that most people are a) risk lovers. b) risk averse. c) risk neutral. d) risk tolerant

b) risk averse.

The government, in the form of Medicare, Medicaid and the Children's Health Insurance Program pay for ____ of health care costs. a) less than 10 percent b) slightly less than half c) about 75 percent d) all

b) slightly less than half

The underlying reason for the upward-sloping nature of the supply curve is that a) the production of most goods comes with increasing marginal benefits. b) the production of most goods comes with increasing marginal costs. c) the consumption of most goods comes with decreasing marginal utility. d) the consumption of most goods comes with increasing marginal utility.

b) the production of most goods comes with increasing marginal costs

The substitution effect suggests that a) when prices are higher, your buying power is less, so you buy less. b) when prices are higher, you buy less of what you originally wanted and use something else instead. c) when prices are higher, you buy fewer because the marginal utility of a good is diminishing. d) when prices are higher, you buy more.

b) when prices are higher, you buy less of what you originally wanted and use something else instead.

Which of the following statements are true

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If you have a $2000 covered health expense, a deductible of $500, and a 20% co-pay, then you pay _____ and the insurance company pays _____. a) $1500, $500 b) $1000, $1000 c) $800, $1200 d) $700, $800

c) $800, $1200

13. Which of the following will impact both supply and demand? a) A change in price b) A change in quantity c) A change in expected future price d) A change in income

c) A change in expected future price

An increase in which of the following determinants of demand will have an ambiguous (uncertain) effect on price? a) Taste b) Price of a complement c) Income d) Price of a substitute

c) Income

The Medicare Trust Fund is necessary because a) current expenses are greater than current revenues. b) current expenses are less than current revenues. c) future expenses will be greater than future revenues. d) future expenses will be less than future revenues.

c) future expenses will be greater than future revenues.

The underlying reason that there are unattainable points on a production possibilities frontier diagram is that there a) is government. b) are always choices that have to be made. c) is a scarcity of resources within a fixed level of technology. d) is unemployment of resources.

c) is a scarcity of resources within a fixed level of technology.

The DRG system controls Medicare expenses by a) preventing doctors from using particular procedures. b) paying hospitals after they submit bills. c) paying hospitals on the basis of a disease or injury rather than expenses. d) paying the patient who then pays the hospital

c) paying hospitals on the basis of a disease or injury rather than expenses.

Medical care inflation is likely to be easily overstated (if you look simply at the increase in the cost of a hospital stay) because that calculation ignores a) the original costs. b) the new costs. c) quality increases. d) quality decreases.

c) quality increases.

The underlying reason production possibilities frontiers are likely to be bowed out (rather than linear) is a) choices have consequences. b) there is always opportunity costs. c) some resources and people can be better used producing one good rather than another. d) there is always some level of unemployment.

c) some resources and people can be better used producing one good rather than another.

When looking at the impact of a change in trade policy, economists use consumer and producer surplus to look at the winners and losers. Free-trade economists insist that a) no one loses. b) everyone loses. c) there are winners and losers but that the gain to the winners is greater than the loss to the losers. d) there are winners and losers but that the loss to the losers is greater than the gain to the winners.

c) there are winners and losers but that the gain to the winners is greater than the loss to the losers.

Answer the following questions about elasticity of demand. a. A retailer noticed that by increasing its price, its total revenue stayed the same. In this case, demand is 1. inelastic. 2. unitary elastic. 3. elastic.

unitary elastic.

Policy makers have considered putting computer chips in cars that would allow tax collectors to charge people based on how often they drive during rush hours. These policy makers are dealing with the fact that public roads are a) purely private good. b) purely public good. c) congestible public good. d) excludable public good.

congestible public good.

If Midwestern grain farmers can plant either soybeans or corn on their land with equal profitability and there is an increase in the price of soybeans, which of the following will result? a) A movement to the right in the demand for corn b) A movement to the left in the demand for corn c) A movement to the right in the supply of corn d) A movement to the left in the supply of corn

d) A movement to the left in the supply of corn

Using a poverty line of $12,500, under the current system of calculating the poverty rate, which of the following people are considered to be in poverty and probably ought not to be? a) A rural family whose sole income earner is from a minimum wage ($10,300) position b) A rural family whose combined income is $15,000 c) A New York City family whose combined income is $13,000 d) A retired couple whose multimillion-dollar estate yields them no income

d) A retired couple whose multimillion-dollar estate yields them no income

Using a poverty line of $12,500, under the current system of calculating the poverty rate, which of the following people are not considered to be in poverty and probably ought to be? a) A rurual family whose sole income earner is from a minimum wage ($10,300) posistion\ b)A rurual family whose combined income is $15,00 c) A New York City family whose combined income is $13,00 d) A retired couple whose multimillion-dollar estate yields them no income

d) A retired couple whose multimillion-dollar estate yields them no income

Which of the following groups of people comprise a majority of those Americans living below the poverty line? a) Blacks and those with no college education b) Immigrant Americans and Hispanics c) Those with no college education and Hispanics d) Blacks and Hispanics

d) Blacks and Hispanics

Which of the following groups of people are poor in numbers vastly out of proportion to their numbers in the general population a) Minorities, women, and immigrants b) Immigrants, women, and children c) Minorities, the lower-middle class, and children\ d) Minorities, women, and children

d) Minorities, women, and children

The most obvious pattern in poverty rates is the degree to which they are higher during a) Democratic administrations b) Wars c) Odd years d) Recessions

d) Recessions

Combined the consumer surplus and producer surplus at equilibrium is a) lower than it would be at prices below equilibrium. b) lower than it would be at prices above equilibrium. c) typically negative. d) as big as it can get.

d) as big as it can get.

When a satellite television company gains a subscriber there is no impact on existing subscribers. That is, there is no rivalry in the consumption for their service. This is an example of a a) purely private good. b) purely public good. c) congestible public good. d) excludable public good.

d) excludable public good.

If the (steadily decreasing) marginal benefit of another day spent in the hospital is equal to the (steadily increasing) marginal cost of an additional day spent in the hospital, the a) net benefit from the hospital stay must be positive. b) net benefit from the hospital stay must be negative. c) net benefit from the hospital stay must be increasing. d) net benefit from the hospital stay is maximized.

d) net benefit from the hospital stay is maximized.

If supply and demand are lines then at equilibrium consumer and producer surplus are both a) equal. b) shown as squares. c) shown as trapezoids. d) shown as triangles.

d) shown as triangles.

An increase in the income of consumers will cause the a) supply of all goods to rise. b) demand for all goods to rise. c) supply of all goods to fall. d) the demand for some goods to rise and for others to fall.

d) the demand for some goods to rise and for others to fall.

One significant feature of a "single-payer" system lacking in the U.S. system is a) government involvement in health care. b) coverage for the elderly. c) coverage for the poor. d) universal coverage.

d) universal coverage

The distribution of aid to the poor between in-kind and in-cash is a) roughly equal b) weighed heavily toward in-cash benefits c) weighted slightly toward in-kind benefits d) weighted heavily toward in-kind benefits

d) weighted heavily toward in-kind benefits

Answer the following questions about elasticity of demand. a. An 18 percent decrease in price results in a 14 percent increase in quantity demanded. In this case, demand is 1. inelastic. 2. unitary elastic. 3. elastic.

inelastic.

If a consumer purchases more of a good as the price falls, we can assume that the consumer's 1. marginal utility has also fallen. 2. marginal utility has risen. 3. total utility has also fallen. 4. preferences have changed.

marginal utility has also fallen.

9. The estimated date of fund exhaustion of the Medicare Trust Fund is so dependent on assumptions made with regard to economic growth, interest rates, and political changes because 1. the higher the projected growth rate in wages, the more projected tax revenues for the fund. 2. the higher the projected real interest rate, the better return on the trust fund. 3. the higher the projected real interest rate, the lower return on the trust fund. 4. the greater numbers of children will produce more tax revenues for the fund. 5. the greater numbers of children will produce greater Medicare expenses. 6. the higher the projected fertility rate, the greater the projected tax revenues for the fund. 7. the higher the projected fertility rate, the greater Medicare expenses. 8. the longer projected life expectancy would be anticipated to create greater Medicare expenses. 9. the longer projected life expectancy would be anticipated to create more tax revenues for the fund.

1. the higher the projected growth rate in wages, the more projected tax revenues for the fund. 2. the higher the projected real interest rate, the better return on the trust fund. 4. the greater numbers of children will produce more tax revenues for the fund. 6. the higher the projected fertility rate, the greater the projected tax revenues for the fund. 8. the longer projected life expectancy would be anticipated to create greater Medicare expenses.

Medicare, Part B is 1. voluntary at a low premium. 2. compulsory at a low premium. 3. compulsory at a high premium. 4. voluntary at a high premium.

1. voluntary at a low premium.

Under the intermediate set of assumptions of the Medicare Trustees Report, payroll taxes ______ cover the likely increase in Medicare expenses. 1. would have to grow substantially to 2. would have to remain constant to 3. could be cut and still 4. and sales tax would have to remain constant to

1. would have to grow substantially to

In 2014, the U.S. spend approximately ____ of GDP on health care. 1. 1% (1/100th) 2. 16% (1/6th) 3. 25% (1/4th) 4. 33% (1/3rd)

2. 16% (1/6th)

Everyone under the poverty line qualifies for Medicaid. 1. True 2. False

2. False

Recently, the amount of time men devote to housework has been increasing while the amount of time women devote to housework has been decreasing. An economic explanation for this trend could be 1. as women have fewer employment opportunities, their opportunity cost of doing housework relative to men has fallen. 2. as women have more employment opportunities, their opportunity cost of doing housework relative to men has risen. 3. as women have more employment opportunities, their opportunity cost of doing housework relative to men has fallen. 4. as women have fewer employment opportunities, their opportunity cost of doing housework relative to men has risen.

2. as women have more employment opportunities, their opportunity cost of doing housework relative to men has risen.

Some people have argued that mandatory health insurance could reduce health care costs because it would address the problem of 1. rational expectations. 2. moral hazard. 3. adverse selection. 4. information asymmetry.

3. adverse selection.

12. There is a "moral hazard" with having health insurance affecting decisions about whether or nor to exercise because 1. there is no definitive evidence that exercise improves health. 2. people feel morally obligated to exercise to meet health goals. 3. any medical issue is covered even if exercising could have reduced or eliminated the outcome. 4. the people who need the most exercise are those least capable of doing it.

3. any medical issue is covered even if exercising could have reduced or eliminated the outcome.

Answer the following questions about elasticity of demand A 4 percent decrease in price results in a 6 percent increase in quantity demanded. In this case, demand is 1. inelastic. 2. unitary elastic. 3. elastic.

3. elastic.

Nursing home care is covered by 1. Medicare, Part A. 2. Medicare, Part B. 3. Medicaid, regardless of income or wealth. 4. Medicaid, but only for the poor.

4. Medicaid, but only for the poor.

Families are automatically eligible for Medicaid if they are on 1. TANF. 2. SSI. 3. Social Security. 4. TANF and SSI.

4. TANF and SSI.

a. Hospitals specialize in low-mortality, low-risk treatments. 1. This is a cost of paying hospitals using prospective payments. 2. This is a cost of paying hospitals on what services they perform. 3. This is a benefit of paying hospitals on what services they perform. 4. This is a benefit of paying hospitals using prospective payments.

4. This is a benefit of paying hospitals using prospective payments.

. In 2013, Medicaid spending (net of CHIPs) per patient was on average 1. $938. 2. $1,652. 3. $4,211. 4. around $7,000.

4. around $7,000.

According to the law of diminishing marginal utility, as more of a product is consumed, 1. the price falls. 2. the amount of extra happiness increases. 3. income falls. 4. the amount of extra happiness decreases.

the amount of extra happiness decreases.