(Consider This) Which of the following best explains why hospital charges of $25 per aspirin are not unusual?
A. Government payments for Medicare and Medicaid patients do not cover hospitals' fixed
costs, so these costs must be distributed to other patients and their private insurance
providers.
B. Government exercises no cost control for Medicare and Medicaid, so hospitals get away
with charging those patients $25 for an aspirin.
C. Pharmaceutical companies have monopoly power over hospitals, allowing them to charge
high prices for medications.
D. Hospitals distribute a medically advanced form of aspirin that costs more to produce.
Answer: A
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Why is a typical person likely to gather more information when buying a new car than when voting for a member of Congress?
A) because it is less costly to acquire information about consumer items than it is about political candidates B) because a person's preferences are more likely to be met with little effort in the political sphere but this is not the case when buying a car in the private marketplace C) because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome D) because the effects of buying a car are long term while a member of Congress has a relatively short tenure
Which of the following statements about cost functions is true?
a. Variable costs will always increase in direct proportion to the quantity of output produced. b. The less capital equipment employed in the production process relative to labor and other inputs, the longer will be the period of time required to increase significantly the scale of operation. c. The shape of the firm's long-run cost function is important in decisions to expand the scale of operations. d. none of the above
Total product begins to fall when:
A. average product is below zero. B. marginal product is maximized. C. marginal product is zero. D. average product is negative.
GDP is not a perfect measure of social welfare and the society's economic well-being because
A. it does not say anything about the distribution of income. B. it does not include all economic activities in the economy. C. GDP accounting rules do not adjust for production that causes negative externalities. D. all of the above.