According to the textbook, the Manning study suggests that a large share of the increase in medical expenditures since World War II has been caused by:
A. the increase in first-dollar medical insurance.
B. the increase in high-deductible policies.
C. advances in medical technology.
D. the annual stipend given to the poor to defray medical expenses.
Answer: A
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The problem of moral hazard that resulted from federal deposit insurance can be attributed to all of the following except
A) depositors have little incentive to monitor their bank. B) deposit premiums until recently did not depend on risk. C) risk aversion by managers of banks plus bank examination. D) the incentive of bank stockholders to increase risk because they share disproportionately in success but the FDIC shares disproportionately in failure.
Marginal product crosses the horizontal axis (is equal to zero) at the point where
A) average product is maximized. B) total product is maximized. C) diminishing returns set in. D) output per worker reaches a maximum. E) All of the above are true.
Producer surplus is
A) the total difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept. B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. C) the total difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive. D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
According to adaptive expectations theory, which of the following would be the result of expansionary monetary and fiscal policies?
a. There is a short-run reduction in unemployment. b. There is a long-run trade off between inflation and unemployment. c. The inflation rate falls in the long run. d. The economy always operates at the natural rate of unemployment