Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women. The new frequency recommendation was designed to address the family histories of the patients. The optimal frequency should be where the marginal benefit of an additional pap-test:
a. equals zero.
b. is greater than the marginal cost of the test
c. is lower than the marginal cost of an additional test
d. equals the marginal cost of the test
e. both a and b.
d
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Attempts to influence the law for your own private economic advantage is called
A) tax imposition. B) subsidizing. C) rent seeking. D) creating a deadweight loss.
Assuming the market is in equilibrium in the graph shown with demand D and supply S1, total surplus is:
A. greater than total surplus when market is in equilibrium at D and S2.
B. less than total surplus when market is in equilibrium at D and S2.
C. the same as total surplus when market is in equilibrium at D and S2.
D. zero.
Economists generally prefer to deal with emissions of pollutants
a. with direct controls. b. by encouraging people not to pollute. c. by subsidizing the installation of pollution-control equipment. d. by taxing emissions.
In domestic economies, inflation bias often exists, which reduces the power of the central bank to use monetary policy to stimulate economic activity. If an anti-inflation nation such as Germany enters into a monetary union with such nations, what remedy is there for this problem?
A) Germany would have to conform with an activist monetary policy that gave preference to economic performance. B) Germany could insist on the central bank being insulated from politics and democratic control. C) Germany could insist that all central bank policies be reviewed by the Parliament. D) Germany would allow nations into the monetary union, even with their inflation bias, because that would disappear quickly on joining the Eurozone.