econ exam 2

Referring to Table 4.2, Box D should be filled with

2

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

$1,000.

Using Table 6.1, the inflation rate for 2004 would be

. 3.3% (((190.3-184.3)/184.3)*100 %).

In 2014, the U.S. spend approximately ________ of GDP on health care.

16% (1/6th)

Suppose there are 5 makers of tablet computers with market shares of 80%, 5%, 5%, 5%, and 5% respectively. The HHI is

6,500.

Using Table 6.1, from the 1982-1984 base to 2002, prices increased

80.9%

The percentage of the population over 16 that is employed or seeking employment is called the

Labor Force Participation Rate.

In Figure 32.1, at the market price-quantity combination, the consumer surplus is

P*AC.

In Figure 5.4, a monopolist would charge which price?

P4

In Figure 5.1, what output would a perfect competitor produce?

Q2

Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour.

Their total fixed cost is $1000/lawns mowed.

Which population group is largely responsible for the increase in the labor force participation rate during the period from 1950 to 2000?

Women

Economic Profit exists whenever

a firm makes more than the minimum required to maintain the incentive to remain in the industry.

Referring to Figure 4.1, the increase in output from point A to B is less than the increase in output from point B to C because

a small number of workers cannot take as good advantage of the division of labor as a larger number

If a health economist is worried that a system of health insurance will break down because, when combined with policies outlawing the use of an individual's health information in setting coverage and rates, the sickest will be the only one who will want insurance and the healthiest will go without insurance, that economist is focused on the problem of

adverse selection.

Fee-for-service insurance

allows patients to pick their own doctor

A graph which maps the total costs of production against the amount made is called the

cost function.

The primary means by which a farmer can protect against weather-related crop failure is with

crop insurance.

Economists consider deflation

dangerous, as it can lead to a depression.

If members of the labor force who had been classified as "unemployed" fail to find a suitable job and stop looking for work, their decision tends to make the unemployment rate

decrease as the labor force decreases.

A production function begins at the origin because

firm with no employees will have no output.

Supposing a firm is a price taker, the demand for that firm's product is

flat line at the market price.

The degree to which gasoline and corn prices are linked is dependent on

how high gasoline prices are, because when they are high, corn-based ethanol becomes a more attractive substitute

The majority of people with private health insurance get it

in groups.

One subject of study for macroeconomics is

inflation.

One problem with using Real Gross Domestic Product as a measure of social welfare is that

it fails to count home production.

Suppose you are deciding whether or not to increase production. You are making a loss with many competitors. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to $9.50, and your average fixed costs will decrease. Finally, the price you are able to charge will be $9.75. You should

leave production unchanged because profit is maximized where you are

Which of the following was made illegal under the Patient Protection and Affordable Care Act?

lifetime maximum

Relative to the U.K., Japan, Germany, and France, life expectancy in the U.S. is

lower by one to five years.

The fast food industry can be modeled best using the model of

monopolistic competition.

Suppose you can fly from your home city to New York but only one airline provides the service. This market would be described by

monopoly.

Being risk averse means that you would be willing to pay ________ than the expected outcome in order to guarantee an outcome.

more

On health care issues, the U.S. generally spends

much more as a percentage of GDP than other nations

A firm that has a branded product is

not likely to be in perfect competition.

An industry with Herfindahl-Hershman Index of 4,000 would best be described as

oligopoly.

Suppose people on diets buy the bulk of the ground chicken and ground turkey sold in the U.S., and they use either interchangeably, as a substitute in recipes for ground beef. If the price of ground turkey rises and the price of ground chicken does not, then CPI will

overstate inflation because of the issue of substitution.

Government can support agricultural prices by

paying farmers not to produce in particular fields

Health Care is not like other goods and services because

people go to the doctor to find out what is wrong, whereas they get other services knowing more about what they need and if a newly discovered cure costs a lot, we say, incorrectly, that its price has risen.

The freedom of entry and exit is key to pressuring economic profit to zero under

perfect competition and monopolistic competition.

There are one-half million grain farmers in the country producing corn. The best model to analyze this market is

perfect competition.

Medicaid is the Federal Government program that provides health insurance to the

poor.

Agricultural subsidies are generally

popular with politicians and unpopular with economists.

When the government wishes to help producers of goods (such as farmers) by establishing the minimum price at which their good can be sold, economists call this a

price floor.

The Eau Claire Rule is in place to

protect dairy farmers outside Wisconsin

The period of growth from a trough that brings Real GDP back to its previous peak is called a

recovery.

Nations with single payer systems typically have

relative equality in the access to basic care

Suppose someone knew that the probability of incurring a $10,000 medical expense was 5%, and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $500 premium it would cost to get full coverage and decided to buy the insurance, but only if the price went no higher then economists would say, they are

risk-neutral

Between 2006 and 2013, prices for food commodities

rose far faster than inflation.

The shutdown condition for a firm is to

shutdown if price is less than Average Variable Cost.

A justification for government price supports on agricultural products that economists generally accept as potentially legitimate is

the price variability needs to be dampened.

If a firm has $1,000,000 in fixed costs and variable costs equal to $100 for every unit they produce,

their fixed costs are decreasing.

If the market price for a crop is $4.00 a bushel, and the price support is $5.00, then dropping the price support to $3.50

will cause the price received by farmers to rise.

If MR<MC, the firm should produce

zero.