There is a bill pending before the Kansas State Legislature that would prohibit private companies from selling health insurance and would make the state the single payer of health care bills. Private health insurance companies that have made above normal profits have spent large sums of money trying to ________. This is an example of rent-seeking behavior.
A. prevent this bill from being passed into law
B. pass an even more restrictive bill
C. fund the state for its single-payer system
D. get this bill made into law
Answer: A
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If nominal money supply grows 3% and real money demand grows 8%, the inflation rate is
A) -5%. B) 8/3%. C) 5%. D) 11%.
In the Keynesian model, which of the following will cause a reduction in interest rates?
A) An increase in money demand B) An increase in money supply C) An increase in saving D) A decline in saving
Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. Refer to Figure 9-3. What is the area that represents the deadweight loss as a result of the quota?
A) G + H
B) G + H + I + J
C) E + I + J + M
D) E + M
Which statement is false?
A. A profit-maximizing perfectly competitive firm will increase production when price exceeds marginal cost. B. The lowest point on a perfectly competitive firm's short-run supply curve is at the shutdown point. C. A perfectly competitive firm will operate at that output where MC equals MR only when it is minimizing losses. D. A profit-maximizing perfectly competitive firm will decrease production when marginal cost exceeds price.